News - Steel Market Update - Steel Market Update Sun, 26 Feb 2017 07:25:52 -0500 Joomla! - Open Source Content Management en-gb ArcelorMittal USA Quantifies Flat Rolled Base Pricing (Again)

If at first you don’t succeed, try, try again.

On Monday Nucor began the flat rolled steel price increase announcement train as they, and just about every other flat rolled mill in the United States, came out with a $30 per ton increase. Steel buyers, however, were confused as to where spot base prices were headed and Steel Market Update collected a range of responses to that question ranging from $610 to $650 per ton on hot rolled and $840 to $860 on cold rolled and coated steels.

On Wednesday, ArcelorMittal USA (AM) once again provided some guidance as to what “minimum” base prices should look like. The mill told their customers, “Our books are currently open to receive orders for production and shipment of Hot Rolled Sheets in the March/April timeframe and Cold Rolled and Coated Sheet deliveries are now into late April/early May, respectively…”

]]> (John Packard) Steel Prices (North America) Thu, 23 Feb 2017 17:12:39 -0500
February Imports Trending Higher than Expected

February 2017 steel import licenses are suggesting that foreign steel imports will be markedly higher than February 2016. Last year the U.S. imported 2.2 million tons of foreign steel. Right now, based on import licenses collected through February 21, 2017, the trend is for imports to reach 2.6 to 2.7 million net tons. This would be inline with the past few months but, as we stated earlier, well above 2016 levels.

There are four items that are of concern from our perspective:

]]> (John Packard) Imports Thu, 23 Feb 2017 16:31:32 -0500
Hot Rolled Futures: Buckle Your Chinstrap

The following article on the hot rolled coil (HRC) futures markets was written by David Feldstein. As the Flack Global Metals director of risk management, Dave is an active participant in the hot rolled coil (HRC) futures market and we believe he will provide insightful commentary and trading ideas to our readers. Besides writing Futures articles for Steel Market Update, Dave produces articles that our readers may find interesting under the heading "The Feldstein" on the Flack Global Markets website

]]> (Dave Feldstein) Hot Rolled Futures Thu, 23 Feb 2017 15:12:34 -0500
SMU Steel Summit Conference Comes with App & Wi-Fi

Steel Market Update continues to develop new and better ways to simplify and enhance your conference experience at this year's SMU Steel Summit Conference.

A couple of years ago, Steel Market Update (SMU) rolled out our SMU Steel Summit Conference App. At first, it seemed like a novelty. It was a nice way to list our attendees but the concept was too new for most of our attendees to grasp and use the other features.

Last year we expanded our use of the SMU App. The 2016 SMU Steel Summit Conference had 80 percent of the attendees download the App. Last year the most popular area was once again the ability to access those who were attending the conference. We also found more people figuring out that they could access the Power Point presentations of our speakers through the App. During the conference we used the polling feature for the first time. That’s when we found out twice as many of our attendees supported Donald Trump than did Hillary Clinton. Our attendees were on the leading cusp of knowing who would be the next president months before the election.

]]> (Ray Culley) SMU Steel Summit Conference Thu, 23 Feb 2017 14:30:56 -0500
California Steel First Mill in 2017 to Increase Galvanized Coating Extras

On Wednesday, February 22, 2017, California Steel Industries (CSI) sent a letter to their customers advising them of their intention to adjust their extras used when pricing galvanized steels in various thicknesses and coating weights.

LME Zinc pricing has been on a tear over the past year as it has moved from $0.80 per pound one year ago to as high as $1.33 per pound within the past couple of weeks.

]]> (John Packard) California Steel Industries Thu, 23 Feb 2017 13:54:31 -0500
Priefert Answers Questions about Demand

Market segments tend to run in cycles and rarely are all segments clicking at the same time. A good example is during the Great Recession, which crushed most steel consuming market segments, we learned through Priefert Manufacturing that farm, ranch and rodeo equipment were quite strong. As the economy improved cycles shifted and over the past couple of years the farm, ranch and rodeo business slowed. We reached out to Chris Shipp, General Manager of Priefert Steel to see how the company is seeing business in its core farm, ranch & rodeo equipment as well as the service center section of the company which supplies a variety of market segments in the Texas, Arkansas, Idaho and surrounding areas.

SMU: Chris, how are you seeing demand for Priefert Manufacturing's core business?

]]> (John Packard) Economy Thu, 23 Feb 2017 12:16:43 -0500
Existing-Home Sales Grow 3.3% in January

Existing-home sales in January increased at the fastest pace since February 2007, said the National Association of Realtors. January sales grew 3.3 percent year over year to a seasonally adjusted annual rate of 5.69 million.

]]> (Sandy Williams) Housing Thu, 23 Feb 2017 09:22:53 -0500
ABI Slips in January Following Strong December

The Architecture Billings Index slipped into negative territory in January with a score of 49.5, down from 55.6 in December. A score above 50 indicates an increase in billings. The new projects inquiry rose to 60.0 from 57.6.

]]> (Sandy Williams) AIA Billings Index Wed, 22 Feb 2017 16:07:01 -0500
SMU MoMo Index Signals End to Higher Price Momentum

The Steel Market Update Steel Price Momentum Index (MoMo) for hot rolled steel in the United States turned negative this week, following a long 14 week positive streak. MoMo is a trailing indicator and shows the relationship between the current U.S. hot rolled coil price movements against the previous 12-week average price as a percentage. A positive MoMo index indicates hot rolled steel prices are moving in an upward direction compared to the previous 12 week period, while a negative index number indicates a downward direction in prices.

MoMo should not be confused with the SMU Price Momentum Indicator which is a forward looking indicator. The SMU Price Momentum Indicator is currently at Higher indicating that steel prices are expected to rise over the next 30 days.

]]> (Brett Linton) SMU Momentum (MoMo) Model Wed, 22 Feb 2017 15:19:20 -0500
Tenth District Manufacturing Expands in February

Tenth District manufacturing expanded in February achieving its highest index reading since June 2011, said the Federal Reserve Bank of Kansas City. The month over month composite manufacturing index was at 14 in February after registering 9 in January and December.

New orders, order backlog and employment indexes were higher in February, while production and shipments, although still solid, eased from January levels. The finished goods inventory index jumped from -4 to 5 and the raw materials inventory index posted at 11, compared to -3 in January.

]]> (Sandy Williams) Federal Reserve District Indexes Wed, 22 Feb 2017 14:10:54 -0500
Final Thoughts

Scrap, scrap, scrap, scrap and scrap...that is what everyone is going to be talking about for the next week to ten days. David Feldstein in tonight's HRC Futures article suggested prime grades could go higher in March by as much as $80 per gross ton. I have read articles that suggest the numbers could be up $30, $40, $50, $60 per gross ton. At this moment, I don't think I can bring any calm to the rampant speculation. We will write more on the subject of ferrous scrap, March negotiations and what is "real" vs. posturing in a few days. Until then, the steel mills have set the stage to jump prices should scrap go up by $40 per gross ton or more in March. Steel buyers should be aware of what is going on around you and those end users who tend to not pay attention you may want to be careful - read our stuff, the AMM, Mike Marley of WSD and others and be prepared for Momentum to bounce back in favor of the domestic mills. SMU Price Momentum Indicator is still pointing toward Neutral but, when we first moved to Neutral the bias was for prices to slip a little (they did) and now our bias is for a reversal of fortunes. Being the steel business we will wait and watch the pieces drop into place and we will report what we learn as they fall.

I understand that US Steel has adjusted their zinc coating extras for galvanized steel. We will try to find the new extras and will provide an analysis between the old and new. If you have a copy please send it over to us at USS normally updates their extras on their website shortly after making changes. You can find their extras using this link.

]]> (John Packard) Final Thoughts Wed, 22 Feb 2017 08:00:00 -0500
Ternium Purchases CSA from Thyssenkrupp AG

Ternium announced today the purchase of 100 percent of Thyssenkrupp AG’s Brazilian steel mill CSA, Cia Siderúrgica do Atlantico SA. The sale is based on a September 30, 2016 valuation of EUR 1.5 billion (US$1.86 billion) that is subject to agreed adjustments at closing. Ternium expects to disburse EUR 1.26 billion ($1.33 billion) for the transaction and assume EUR 300 million of CSA’s debt. The transaction is subject to antitrust clearance in several jurisdictions, including Brazil, Germany and the United States, and is expected to close on or before September 30, 2017.

The sale includes the transfer to Ternium of the agreement to supply 2.0 million tons of slabs from CSA to the Calvert re-rolling facility in Alabama.

]]> (Sandy Williams) Ternium Tue, 21 Feb 2017 21:41:48 -0500
SMU Price Ranges & Indices: Still Deals Being Made...

We had three price announcements and at least one verbal announcement on flat rolled steel since the week began. Everyone is wondering if the other steel mills will follow and what will the base prices be when the dust settles? Based on what we have been hearing from steel buyers today, the suggested minimum base prices ArcelorMittal USA made in January might be the new goal for the latest announcements. ArcelorMittal, at that time, recommended minimum base prices on hot rolled of $640 per ton ($32.00/cwt) and $850 per ton ($42.50/cwt) on cold rolled and coated. So, the latest price increase announcements may be more about ending the slide and moving the needle back to in the favor of the steel mills.

In the meantime, we still have Big River Steel being aggressive on hot rolled. One of the buyers we spoke with today told us about his suppliers, " the way, with the exception of coated products, there are deals still being made."

]]> (John Packard) Price Indices Tue, 21 Feb 2017 16:58:39 -0500
Nucor, NLMK & UPI Announce $30/Ton Price Increase on Flat Rolled Steel

Three mills have made price increase announcements of $30 per ton on all flat rolled products produced by those mills. The three mills are Nucor, NLMK USA and USS/POSCO (UPI) on the West Coast.

On Monday morning Nucor made it official and was the first mill to announced a $30 per ton ($1.50/cwt) price increase on flat rolled steel. The increase was made in the form of a letter emailed to their customers. No explanation was provided by the mill to their customers for the reasoning behind the steel sheet price increase.

]]> (John Packard) Steel Prices (North America) Tue, 21 Feb 2017 16:16:05 -0500
Weekly Raw Steel Production at 36 Week High

For the week ending February 18, 2017, the American Iron & Steel Institute (AISI) estimated the U.S. steel industry produced 1,766,000 net tons of raw steel, a 1.6 percent increase over the previous week and a 3.3 percent increase over the revised rate from the same week one year ago. The estimated capacity utilization rate for steel production is 74.6 percent, up from 73.4 percent last week and up from 73.1 percent this time last year.

]]> (Brett Linton) Weekly Raw Steel Production Tue, 21 Feb 2017 14:32:44 -0500
Chinese Steel Market Analysis for the Week Ending February 19th

The following analysis of the steel markets in China is from Beijing Metal Import & Export Co.,Ltd and is being reproduced by Steel Market Update with permission. We edited the original copy to assist our readers in understanding what the group is trying to relay to us. Here is what they had to say (edited version):

Please allow me to update China steel market (Feb 13 - Feb 19, 2017) as usual as following:

]]> (John Packard) International Steel Mills Tue, 21 Feb 2017 13:44:20 -0500
Shipping and Freight Report, February 2017

Freight shipment by various transportation modes seems to be moving fairly well as February winds down. Seaborne freight is improving and barge traffic is resuming normal operations after the winter. Trucking saw some seasonal slowdown after the holidays and rail traffic was up year over year in recent weeks.

The Association of American Railroads welcomed Elaine Chao’s appointment as Secretary of the Department of Transportation and commented on White House proposals for reducing regulations and controlling costs.

The trucking industry also welcomed Chao and expressed concerns regarding the administration’s protectionist policies that may affect NAFTA trade.

Seaborne Freight

MID-SHIP Group says the shipping market is cautiously optimistic. The oversupply of vessels has moderated with fewer new vessels expected to arrive this year and next. Scrapping of vessels slowed in fourth quarter as market rates improved but MID-SHIP speculates scrapping activity may increase in early 2017.

Demand in the seaborne market continues to improve. “A combination of market forces with-in the steel industry, government interventions in China and India to curtail environ-mental impact and reduce energy consumption have contributed to higher imports and led to higher seaborne demand.”

Congestion is expected to be a problem at ports in the coming weeks as coal imports increase. Wait times have increased for coal vessels in Indonesia, impacting more than 100 vessels. Vessel lineups are expected to increase in Brazil and Argentina as the export season begins in March, said MID-SHIP.

The Baltic Dry Index closed at 757 on February 20, 2017. The BDI tracks dry-bulk rates based on vessel size and shipping route and is a used as a benchmark for overall trade volume.


River traffic is operating smoothly as warmer temperatures prevail on most of the river system. Fog continues to be a problem along the U.S. Gulf coast causing some delays for barges between the mouth of the Mississippi and Baton Rouge as well as the Gulf Intracoastal Canal East and West, said MID-SHIP.

Barge lines have been able to begin loadings in NOLA last week for northbound shipments as far as Clinton, Iowa with further destinations expected shortly. Upper Mississippi locks are expected to resume operations between February 28 and March 4.

MID-SHIP reports import cargo volumes to the Mississippi are “unimpressive” expect for aluminum and fertilizer imports. Aluminum imports are continuing to surge.


The Association of American Railroads (AAR) y reported U.S. rail traffic for the week ending February 11, 2017 was 518,431 carloads and intermodal units, up 2.6 percent compared with the same week last year.

Total carloads for the week ending February 11 were 253,670 carloads, up 3.9 percent compared with the same week in 2016, while U.S. weekly intermodal volume was 264,761 containers and trailers, up 1.5 percent compared to 2016.

Edward R. Hamberger, president and CEO of the Association of American Railroads (AAR) commented on the Executive Order by the Trump administration, "Reducing Regulation and Controlling Regulatory Costs." The industry is pleased to see discussion and action on the regulatory system, said Hamberger.

"Regulators too often today lose sight of clearly defined end goals that would ultimately benefit the general population. We ought to propose more desired results and less prescribed means to that end. We believe that a more nimble regulatory structure will foster greater economic growth and we are excited to partake in this important effort to improve the regulatory system.”

Hamberger said, “That is why the freight rail industry continues to offer principles for reform, including that rules should be based on a demonstrated need, as reflected in current and complete data and sound science; and non-prescriptive regulatory tools, like performance-based regulations, should be deployed wherever possible to align the interests of the regulator and the industry, and to foster and facilitate innovation to achieve well-defined policy goals."


The American Trucking Association reports the For-Hire Truck Tonnage Index fell 6.2 percent in December, following a revised 8.4 percent jump during November. The Index registered 133.8, a 0.7 percent decrease from the previous December. For the full year 2016, tonnage was up 2.5 percent.

“Looking ahead, there are some positive signs for truck tonnage,” said ATA Chief Economist Bob Costello. “This includes the continued spending by consumers, larger wage gains, and solid home construction,” he said. “Factory output will continue to be soft, but it should be better this year than last year. And most importantly, the supply chain continues to make progress reducing bloated inventories, which will help truck volumes going forward.”

DAT Trendlines reports flatbed-load-to-truck ratio continued to increase, gaining 13 percent in the week of Feb 5-11 for 24.6 loads per truck nationally. The national average flatbed rate jumped 4 cents to $1.96 per mile. Spot rates ranged between $1.65 per mile in Phoenix to $2.53 per mile in the Harrisburg/Baltimore region. Van and reefer rates and loads continued to decline during the period which is typical for what is considered a slow month for freight, said DAT Trendlines.

Diesel On-Highway fuel price as of Feb. 13, 2017 was $2.565 per gallon, a 0.007 increase from the previous week and an increase of 0.585 year over year.

Trucking industry expresses concern about trade

Reactions to proposed trade policies by the Trump administration have been mixed. The American Trucking Association wants to find a way to work with the administration and Congress to grow jobs and support the trucking industry.

"Trade and trucking are synonymous, and the increased movement of freight yields more good paying jobs and growth in American companies,” said Bill Sullivan, executive vice president of advocacy for ATA, in a recent article for HDT Truckinginfo

“We want to help the administration and Congress build a trade framework that helps grow our economy, including the trucking industry," he continued. "Since 1995, the value of goods traveling between the U.S. and Canada has risen dramatically – nearly 168% to $712 billion, supporting thousands of jobs in the trucking industry. For U.S. trade with Mexico, trucks move 83% of the trade between the two countries, in all making 5.5 million crossings in 2015. We will work to support any trade policies that help grow good-paying American jobs and the trucking industry."

Discussions to abandon or rewrite NAFTA have raised concerns for the industry. According to the U.S. Department of Transportation October 2016 report, trucks carried 65.2 percent of U.S.-NAFTA freight. Trucks accounted for $31.9 billion of the $50.3 billion of imports (63.4 percent) and $29.0 billion of the $42.9 billion of exports (67.6 percent).

Marina Whitman, professor of Business Administration and Public Policy at the University of Michigan, told HDT that some aspects of Trump’s trade plans would certainly benefit truck fleets. “Reforming corporate taxes and certain moves to deregulate the industry would certainly be beneficial for fleets,” she said. “On the other hand, the strong protectionist slant taken by the Trump administration is, I think, significantly damaging to industry in general and trucking in particular, since trucking is highly sensitive to any disruption in this highly integrated market.”

“And if any of President Trump’s protectionist proposals become fact, they will put a real damper on trade in general,” she noted. “The Canadians are very concerned about the animus aimed at Mexico from the Trump White House, because their industries – particularly their automotive industry – is highly integrated with Mexico. And they are very worried they will get caught in the fallout from a major U.S.-Mexico trade dispute. And that would be bad for trucking because the physical movement of goods and services is highly important to that economic success.”

“There are no other markets trucking can look to if these agreements end,” she added. “Digital commerce cannot make up the shortfalls that will occur in the trucking industry if that happens.”

Greg Wright, a professor of economics at the University of California, Merced, said the global supply chain is incredibly sophisticated and NAFTA is an example of that. Wright told HDT, “Auto transmissions are made in Canada and brake lights in Mexico, etc. and trucking keeps the whole process going. So, I would say that U.S. truckers should be very wary of any effort to close the southern border to commerce.”

"Trump’s proposals are particularly dangerous because they are so extreme," he continued. "A new 20% import tariff between two countries that participated in a free trade zone is sure to set off a series of legal actions in NAFTA adjudication panels, WTO adjudication panels, and U.S. and Mexican courts. It is also very likely to provoke retaliation from Mexico in the form of raised tariffs and other barriers. This could dramatically cut the demand for moving freight across the border as well as interfere with the legal ability to do so.”

]]> (Sandy Williams) Shipping and Logistics Tue, 21 Feb 2017 11:51:37 -0500
Next Steel 101 Workshop to Tour North Star BlueScope

In 48 days, Steel Market Update (SMU) will hold our second Steel 101: Introduction to Steel Making & Market Fundamentals workshop in Toledo, Ohio.

Our workshops are uniquely suited for those new to the steel industry or those who are looking to “fine tune” their steelmaking and rolling skills as well as getting a better understanding of the ever-changing and challenging steel industry.

Our instructors have been active participants in the industry as metallurgists (2); sales at the mill level (2), service center (1) and trading company (1); OEM purchasing (1). Two of our instructors: Peter Wright and John Packard are also actively involved in analyzing and writing about the steel industry. The net result being we can discuss the industry from many vantage points based on experience.

Those attending the workshop come from a variety of backgrounds and job descriptions. We have steel mill people in every workshop, service centers, manufacturing companies, toll processors, suppliers to the industry and members of the financial community. We intentionally provide a suitable environment for not only learning but also networking with others within the industry.

]]> (John Packard) Steel 101: Introduction to Steelmaking & Market Fundamentals Tue, 21 Feb 2017 10:59:42 -0500
CEO Praises “Stunning” First Half for North Star Bluescope

North Star Bluescope Steel reported underlying EBITDA in the first half of FY 2017 of $180.2 million, an increase of 178 percent from 1H FY 2016 . Sales revenue was US$ 598.7 million.

The mill operated at 100 percent capacity in the first half and benefited from lower conversion costs, particularly in utilities. Shipments for 1H FY 2017 totaled 1,016,500 tonnes and production was 1,061,700 tonnes. 

]]> (Sandy Williams) Northstar Bluescope Tue, 21 Feb 2017 09:17:20 -0500
Quebec Zinc Plant on Strike

Employees at a zinc processing facility in Quebec have gone on strike raising concerns for metal producers that use the alloy in galvanized steel.

CEZinc, in Salaberry-de-Valleyfield, Quebec is co-owned by Glencore and Noranda Income fund. Employees say the company demanded major pension concessions, despite an over-funded pension plan, and has rebuffed union suggestions for cost-cutting alternatives.

]]> (Sandy Williams) Zinc Mon, 20 Feb 2017 14:26:54 -0500
Final Thoughts

Galvanized steel buyers need to remain aware of the movement in zinc pricing. With the strike at the zinc-processing facility in Canada there is a possibility that zinc supplies could tighten here in the United States. Zinc prices have been trading on the LME in the $1.30-$1.35 per pound over the past week. At the beginning of January zinc was trading for $1.22 per pound. if the higher zinc prices continue (remember, the steel mills pay an additional $0.065-$0.08 per pound premium for the metal) then galvanized steel buyers should expect new higher coating extras for 2nd Quarter 2017.

]]> (John Packard) Final Thoughts Mon, 20 Feb 2017 08:00:00 -0500
Price Increase Rumors Starting to Float

A large flat rolled steel service center shot me a note late on Friday advising a steel mill had told them earlier in the day to expect a $40 per ton price increase as soon as Monday of this week. At the same time the customer was told if scrap prices in March increase by more than $50 per ton there would be a second increase in the first week of March.

The distributor then went on to say about the timing of any increase announcement, “Earlier they announce the better chance of impacting March CRU.”

]]> (John Packard) Steel Prices (North America) Sun, 19 Feb 2017 18:32:25 -0500
Steel Mill Lead Times: Stable to Slightly Shorter

Steel mill lead times, the time it takes for a new order to be produced by the domestic flat rolled steel mills, remain essentially unchanged from what Steel Market Update reported at the beginning of February. The lead times being reported are compiled by Steel Market Update as part of our flat rolled steel market trends analysis. The number of weeks shown by product are the average of the responses received from our questionnaire. Actual mill lead times will vary by mill and steel buyers need to be in contact with their steel mill suppliers to find out where their mill specific lead times are being promised.

Hot rolled lead times, at just shy four and a half weeks (4.40), are consistent with levels reported over the past couple of months. What is interesting is the average HRC lead time now is a week longer than what we reported one year prior (3.55).

]]> (John Packard) SMU Mill Lead Times Sun, 19 Feb 2017 16:02:19 -0500
Steel Mill Price Negotiations on Flat Rolled Increasing

The respondents to our latest SMU Flat Rolled Steel Market Trends Analysis are reporting steel mills as actively negotiating prices on all flat rolled with the possible exception of Galvalume.

Seventy-nine percent of the respondents reported steel mills as willing to negotiate hot rolled spot pricing. We need to go back to our mid-October 2016 analysis in order to find a percentage exceeding 50 percent.

]]> (John Packard) SMU Mill Negotiations Sun, 19 Feb 2017 15:21:19 -0500
Global Trade of Hot Rolled Coil through Q3 2016

This is the second in a series of new reports on global trade of hot rolled and cold rolled products. In the future these articles (the first one was published on Tuesday, February 14th) will be part of our Premium level products and will be published in our Premium supplemental newsletter. If you would like to learn more about becoming a Premium level member please contact us at 800-432-3475 or

We are continuing our investigation to quantify the players in the global steel trade of both hot rolled coil and cold rolled coil. In our report published earlier this month we provided an overview for both products. In this latest update we have dug deeper into what is the US share of total global HRC imports, where Vietnam’s imports are coming from, and where China’s hot rolled exports are headed.

]]> (Peter Wright) Imports Sun, 19 Feb 2017 13:57:05 -0500
Dr. Chris Kuehl to Return as a Keynote Speaker at 7th SMU Steel Summit Conference

Dr. Chris Kuehl of Armada Corporate Intelligence will once again provide his insights into the workings of the world, North America and, maybe more important for this year’s SMU Steel Summit Conference, he will attempt to figure out what President Donald Trump means for the business community.

Dr. Kuehl has spoken at previous SMU Steel Summit Conferences and has proven to be both entertaining and informative.

In a recent note to their customers Armada Corporate Intelligence spoke about confidence being up but does the data support the higher confidence being seen by various indices (including SMU Steel Buyers Sentiment Index):

“There has long been a joke about economists that asserts that when observing something occurring in reality the economist wonders if it will work in theory. Right now, confidence levels are rising in almost every iteration and not just in the US. Consumer confidence is up in both the University of Michigan and Conference Board surveys, business confidence is up according to groups as disparate as the National Federation for Independent Business, the Business Roundtable and the various polls that are sponsored by the likes of the Wall Street Journal and CFO Magazine. Confidence is up in the European Union despite the fears of Brexit and Frexit and even the sometimes morose Japanese are expressing renewed enthusiasm as the lower valued yen has boosted exports. Is all of this enthusiasm justified or can it all be attributed to “animal spirits” since the election.
“Analysis: In fact, the data is supporting this rosy outlook and should continue to do so through the bulk of 2017. Many of the positive trends that are developing at this point trace their origins to what happened in 2016 and this means that this activity has been building for at least a year….”

]]> (John Packard) SMU Steel Summit Conference Sun, 19 Feb 2017 12:26:50 -0500
MSCI Calls for New Strategy in Trade Law Enforcement

The Metals Service Center Institute (MSCI) called on the Trump administration to create a strategy that will evaluate trade violations impacting the entire industrial metals supply chain. MSCI president and CEO Robert Weidner said trade enforcement measures must protect not only the mills but also distributors, fabricators and processors in the supply chain.

MSCI has taken a proactive stance in advocating for the metals industry. In a memo to the vice president and trade officials in the new administration on January 10, MSCI emphasized the need to focus on six broad issues: trade and currency manipulation; taxes and fiscal responsibility; regulations; energy, environment, and infrastructure; health care; and employment and labor policy. MSCI has also addressed the International Trade Commission and the World Trade Organization on the need to stem global oversupply of aluminum and steel.

]]> (Sandy Williams) MSCI Sat, 18 Feb 2017 18:09:28 -0500
Comparison Price Indices: Not Much Happened Last Week

Flat rolled steel spot prices have recently given back some of the gains made since the first price announcements were announced by U.S. steel mills in late October.  In the past 13 weeks flat rolled prices increased by $160 per ton or more depending on product and the starting point for any specific steel buyer. Over the past few weeks we have seen some erosion in spot prices. Last week we found stability in most of the indexes followed by Steel Market Update (note: SteelBenchmarker reports prices twice per month).

]]> (John Packard) Price Indices Sat, 18 Feb 2017 16:16:06 -0500
Service Centers in Early Stages of Discounting Spot Steel Prices

Steel Market Update (SMU) watches the flat rolled steel service centers very closely for signs of strength or weakness. These signs come in the form of discounting spot prices to their customers (or to each other). As markets weaken and the steel mills become more aggressive in their negotiations with the distributors, the service centers tend to react by attempting to limit their exposure to what they perceive to be high-priced steel inventories.

Right now, the market spot price cycle appears to be similar to what we saw at the end of the “up” pricing cycle in late 2nd Quarter 2016. The price increase announcements stopped and prices began flattening out and then moving lower. In the graphic below, the service centers are just beginning to break ranks and begin lowering spot prices to their flat rolled steel customers. The ovals above the bars represent steel mill price increase announcements as reported by AK Steel. We use AK Steel as their increase announcements are part of their press release files on their website (so anyone can go look at the announcements). The last price announcement was made in early January 2017.

]]> (John Packard) SMU Steel Survey Results Fri, 17 Feb 2017 18:58:47 -0500
EUROFER Expects Moderate Growth in 2017

EUROFER, the European Steel Association, recently released its Economic and Steel Market Outlook report for 2017-2018. The Association is expecting steel demand to continue its recovery in 2017 and 2018 but is concerned about the rise of unfairly traded imports.

Apparent steel consumption stabilized in the second half of 2016 after rising 3 percent year over year in the first half. For the entirety of 2016, steel consumption rose by 1.8 percent.

]]> (Sandy Williams) World Economy Fri, 17 Feb 2017 15:02:28 -0500
Active Gas & Oil Rig Counts Increase in US and Canada

According to Baker Hughes data from February 17, 2017, the U.S rig count for the week was 751 rigs exploring for or developing oil or natural gas. This is up 10 rigs compared to last week, with oil rigs up 6 to 597 rigs, gas rigs up 4 to 153 rigs, and miscellaneous rigs unchanged at 1 rig. Compared to this time last year, the 751 count is up 237 rigs, with oil rigs up 184, gas rigs up 52, and miscellaneous rigs up 1.

]]> (Brett Linton) Energy Fri, 17 Feb 2017 14:56:44 -0500
Final Thoughts

As mentioned in an earlier article, steel buyers need to be aware of the potential for a new round of price increase announcements out of the domestic mills. The drop in scrap prices in the first few days of February followed by a sharp rise between now and then have the mills a bit on edge. They now believe scrap prices could jump again in March which would put pressure on their margins. Whether any new price increase will stick is another question entirely. We have a couple of new players looking for hot rolled orders and cold rolled and coated trial orders (Big River Steel and Acero Junction).

]]> (John Packard) Final Thoughts Fri, 17 Feb 2017 08:00:00 -0500
SMU Steel Buyers Sentiment Index 3MMA at Record High

Buyers and sellers of flat rolled steel continue to fly high and are optimistic about their company’s ability to be successful both in the existing market environment (Current Sentiment) as well as looking out three to six months into the future (Future Sentiment). Both Current Sentiment and Future Sentiment set record highs based on the three-month moving average.

As a single data point our SMU Steel Buyers Sentiment Index came in at +71 which is down -5 points from the beginning of this month. One year ago Sentiment was reported as being +58. Steel Market Update is of the opinion that our Sentiment Index is a harbinger for a better steel demand environment in the coming months.

]]> (John Packard) SMU Steel Buyers Sentiment Index Thu, 16 Feb 2017 17:56:35 -0500
Steel Distributors Flat Rolled Inventories Fall as Shipments Improve

The Metal Service Center Institute (MSCI) released shipment and inventories data for the steel service centers located in the United States. They reported higher shipment rates coupled with lower flat rolled inventories (higher overall for all products) which is very supportive for prices to tighten over the next 30 days.

U.S. steel service centers (all products) shipped a total of 3,340,400 tons during the month of January. This total for shipments is 9.4 percent above year ago levels. The 9.4 percent increase year-over-year is the largest increase we have seen in a long time. During 2016 there were only two months of positive growth YOY, November at 3.3 percent and August at 2.1 percent.  The daily average shipment rate was 159,100 tons per day.

Inventories stood at 7,296,500 tons at the end of January, an increase of 71,100 tons from the end of December levels.  Inventories are now 8.3 percent lower than year ago levels and the number of month’s supply (all products) stands at 2.2 months compared to 2.8 months at the end of December.

]]> (John Packard) MSCI Thu, 16 Feb 2017 14:59:29 -0500
Analysis of Foreign vs. Domestic Hot Rolled Coil Prices

The following calculation is used by Steel Market Update to identify the theoretical spread between foreign hot rolled steel export prices and domestic (USA) hot rolled coil prices. We want our readers to note that we have made a decision to replace SteelBenchmarker as the primary data provider of foreign hot rolled coil prices. We were finding the comparison between Platts European (Ruhr) number (as well as other Platts foreign export numbers) to be much closer to the actual quotes we are seeing on HRC out of various steel trading companies than using the SteelBenchmarker "world export" number we did previously. We will continue to use SteelBenchmarker as a secondary number provider which we will note further down in our article about HRC price spreads.

Our primary numbers for this exercise are from Platts, with a comparison of European HRC (FOB Ruhr), Turkey HRC export pricing (FOB Turkey), and Chinese HRC export prices (FOB Chinese port). Be aware that Chinese hot rolled is not available to the U.S. market so the Chinese spread is nothing more than an exercise of what if...

]]> (Brett Linton) International Steel Prices Thu, 16 Feb 2017 14:08:04 -0500
US Steel Withdraws Trade Secrets Claim from Section 337 Complaint

US Steel announced today that it will withdraw “without prejudice” its trade secrets claim from the Section 337 complaint it filed with the U.S. International Trade Commission against China. US Steel will continue to pursue its claims of antitrust and false designation.

The company released the following statement:

“We remain committed in our efforts to seek relief for each of the claims alleged in the Section 337 complaint, but today believe this was our best course of action. We continue to pursue a review before executive and judicial bodies of the inequities of the statutes that were enacted before the dawn of the Internet age and the substantial threats posed by cyber espionage.

]]> (Sandy Williams) U.S. Steel Thu, 16 Feb 2017 13:51:06 -0500
Hot Rolled Futures: Buy The Dips

The following article on the hot rolled coil (HRC) futures markets was written by David Feldstein. As the Flack Global Metals director of risk management, Dave is an active participant in the hot rolled coil (HRC) futures market and we believe he will provide insightful commentary and trading ideas to our readers. Besides writing Futures articles for Steel Market Update, Dave produces articles that our readers may find interesting under the heading "The Feldstein" on the Flack Global Markets website

]]> (Dave Feldstein) Hot Rolled Futures Thu, 16 Feb 2017 13:24:18 -0500
Essar Steel Algoma Production in January Best Since 2014

Essar Steel Algoma, under protection by the Companies’ Creditors Arrangement Act since November 2015, held its own in production and sales in January. January production surpassed 232,000 tons making it the highest single month production since September 2014. Improved selling prices and increased shipments brought in revenue of CAD $153 million in January for an adjusted EBITDA of $22 million for the month, $7 million higher than December. The company shipped an estimated 209,317 tonnes in January.

]]> (Sandy Williams) Essar Steel Algoma Thu, 16 Feb 2017 12:37:50 -0500
Canadian Distributor Flat Rolled Shipments/Inventories in January

Total Canadian steel shipments for all products in January were 411,800 net tons, an increase of 42.0 percent from the month before and an increase of 5.7 percent from January 2016. Total steel inventories at the end of the month stood at 1,178,200 tons, up 0.6 percent from last month but down 5.8 percent from the same month one year ago.

]]> (Brett Linton) MSCI Thu, 16 Feb 2017 12:06:47 -0500
Reliance Steel & Aluminum Sees Positive Market Environment

Reliance Steel & Aluminum reported sales of $2.06 billion in fourth quarter, up 1.7 percent from fourth quarter 2015 and down 5.7 percent from Q3 2016. Tons sold at 1,365,000 were down 1.1 percent from Q4 2015 and down 5.6 percent from third quarter. Average selling price per ton sold was $1,500, essentially the same as third quarter and up 2.7 percent year over year. Net income $61.7 million compared to $68.6 million a year ago and $49.5 million in Q3 2016.

Reliance carbon steel sales for Q4 totaled 1,096,000 tons compared to 1,167,400 in Q3, a decline of 6.1 percent. Aluminum sales, at 83,300 tons, also declined in fourth quarter, down 4.6 percent.

]]> (Sandy Williams) Reliance Steel & Aluminum Thu, 16 Feb 2017 11:21:17 -0500
SSAB Americas Shipments Increase in Q4

SSAB Americas posted strong sales and shipments in fourth quarter 1016. The segment, which includes the mills located in Mobile, Alabama and Montpelier, Iowa, shipped 502,000 tonnes in Q4, up 19 percent from the previous quarter and 15 percent from Q4 2015. Sales totaled SEK 2,825 million ($318 million), an increase from third quarter and year ago levels.

]]> (Sandy Williams) SSAB Thu, 16 Feb 2017 10:48:36 -0500
Housing Starts Decline in January but Permits Increase

Housing starts in January declined by 2.6 percent from the revised December total but were 10.5 percent higher than the January 2016 rate, according to the latest report by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. Housing starts were at a seasonally adjusted annual rate of 1,246,000.

Single family starts were up 1.9 percent from December to a rate of 823,000. Starts for apartment style housing of five units or more declined 7.9 percent.

]]> (Sandy Williams) Housing Thu, 16 Feb 2017 10:44:03 -0500
Empire State Manufacturing Survey Jumps 12 Points in February

Manufacturers in New York State are experiencing steady growth, according to the February 2017 Empire State Manufacturing Survey. The headline index for general business conditions rose 12 points to its highest level in more than two years at a reading of 18.7.

]]> (Sandy Williams) Federal Reserve District Indexes Wed, 15 Feb 2017 13:14:51 -0500
The Spread Between Our 12-Week Moving Average & MoMo Shrinking

The Steel Market Update (SMU) Steel Price Momentum Index (MoMo) for hot rolled steel in the United States remained positive for the 14th consecutive week, following a long 17 week negative streak. MoMo is a trailing indicator and shows the relationship between the current U.S. hot rolled coil price movements against the previous 12-week average price as a percentage. A positive MoMo index indicates hot rolled steel prices are moving in an upward direction compared to the previous 12 week period, while a negative index number indicates a downward direction in prices.

MoMo should not be confused with the SMU Price Momentum Indicator which is a forward looking indicator. The SMU Price Momentum Indicator is currently at Higher indicating that steel prices are expected to rise over the next 30 days.

]]> (Brett Linton) SMU Momentum (MoMo) Model Wed, 15 Feb 2017 10:38:50 -0500
Final Thoughts

News for those attending this year's SMU Steel Summit Conference, we will have free Wi-Fi for everyone attending. This will allow attendees to interact easier with other attendees and with our polling and other features on the SMU App. The SMU App will also have some new features this year and we will write about those in the coming weeks. Early registrations have been surprisingly brisk 193 days prior to the beginning of the conference. You can learn more about our conference, browse the speakers as we add them to the growing list, review what companies attended last year and find information regarding the costs associated with attending this year's event. The dates are August 28-30, 2017. The conference will begin with a "Pre-Summit" segment which will be conducted at the Atlanta Airport Marriott Gateway Hotel on Monday afternoon so you will want to plan to arrive into ATL in the morning or early afternoon. There will be plenty of people to network with in the lobby of the hotel as the afternoon. Last year we had 200 people in our Pre-Summit segment and we expect this year to reach 300. If you have questions please feel free to contact me at: 800-432-3475 or

]]> (John Packard) Final Thoughts Wed, 15 Feb 2017 08:00:00 -0500
SMU Price Ranges & Indices: A Breather as Prices Remain Stable

Flat rolled prices held their own this week and remained at, or very near, last week's levels. At the moment we are seeing the mills as willing to negotiate prices on some items but, at the same time we are see some strengthening as scrap prices have firmed up over the past week and may go higher in March. We continue to be in a transition phase and prices could be stable for a week or two before deciding (usually with a push) which direction they will go next.

]]> (John Packard) Price Indices Tue, 14 Feb 2017 17:18:43 -0500
Flat Rolled Price Increases Coming?

The following article is the opinion of John Packard, Publisher, Steel Market Update.

I haven’t gone back and reviewed the records as to how many times flat rolled steel prices moved higher after a quick run up followed by a stable to slightly down market for a couple of weeks. Probably less than the fingers on my hand over the past ten years.

Steel prices moved $160 per ton before stabilizing and then slipping by $20-$30 per ton which is in line with the reduction in ferrous scrap pricing for February.

However, those initial scrap negotiations changed after a few days and have been firming ever since. One of our scrap sources told us today, “We generally expect the ferrous market in March to move higher.  That is a typical seasonal trend, which this year is enhanced by low dealer inventories, continued improving demand in the domestic steel market and now the export market too.  Add in the fact that the Nucor DRI plant will be down.  There are a lot of tailwinds for scrap right now.  I think conservatively we will revisit and potentially exceed the price level we experienced in January.”

Hum, scrap prices appear to be firming to maybe exceeding price levels last seen in January.

]]> (John Packard) Steel Prices (North America) Tue, 14 Feb 2017 16:15:05 -0500
HARDI Steel Committee: Next Move May be Higher Galvanized Prices

It has been four weeks since the last HARDI galvanized steel conference call. The call provides a forum for the HARDI HVAC wholesalers and other associated HARDI members to discuss trends affecting galvanized steel prices. Over the past four weeks market prices have eased a bit but many of the factors that drive prices are pointing toward higher galvanized steel prices in the coming weeks.

Four weeks ago, the domestic steel mills had just announced their fifth price increase since late October 2016. The target base price set by the domestic steel mills was $42.50/cwt-$43.00/cwt ($850-$860 per ton) plus extras, FOB the domestic steel mill. There have been no new increase announcements since early January.

]]> (John Packard) HARDI Tue, 14 Feb 2017 14:25:16 -0500
Weekly Raw Steel Production at 1.74 Million Tons

For the week ending February 11, 2017, the American Iron & Steel Institute (AISI) estimated the U.S. steel industry produced 1,738,000 net tons of raw steel, a 0.9 percent increase over the previous week and a 1.7 percent increase over the revised rate from the same week one year ago. The estimated capacity utilization rate for steel production is 73.4 percent, up from 72.7 percent last week and up from 73.1 percent this time last year.

]]> (Brett Linton) Weekly Raw Steel Production Tue, 14 Feb 2017 13:45:21 -0500
China's Need for Quality Iron Ore Spikes Prices

Iron ore has seen a huge spike in pricing, soaring $5.61 to $92.23 per tonne on Tuesday, Feb. 14 for a 30 month high.

Iron ore stockpiles are up at ports but not the high grade ore that is being sought by Chinese steelmakers. Efforts to reduce pollution and curb overcapacity has led to the closure of smaller and inefficient mills in China, driving up demand for high grade ore, said Rio Tinto CEO Jean-Sebastien Jacques in comments to the Financial Review.

]]> (Sandy Williams) Iron Ore Tue, 14 Feb 2017 12:46:07 -0500
Chinese Steel Market Analysis for the Week Ending February 12th

The following analysis of the steel markets in China is from Beijing Metal Import & Export Co.,Ltd and is being reproduced by Steel Market Update with permission. We edited the original copy to assist our readers in understanding what the group is trying to relay to us. Here is what they had to say (edited version):

Please allow me to update China steel market (Feb 06 - Feb 12, 2017) as usual as following:

]]> (John Packard) International Steel Mills Tue, 14 Feb 2017 11:26:39 -0500
China Capacity Cuts Mostly Idled Production Says New Report

The following article was prompted by a report coming out of a consulting group working for Greenpeace. SMU understands they have a political agenda but we wanted to provide our readers with what was being said and then some commentary at the end from one of our trading friends located in Asia who works with the Chinese steel mills.

China is coming under scrutiny for its steel capacity cut, with reports indicating that cuts were primarily made on already idled plants.

A report by Custeel, commissioned by Greenpeace, says less than a third of the 85 million tons of steel capacity closed in 2016 by China was from actively producing steel mills. According to Custeel, net capacity actually rose last year by 36.5 million tonnes, or 1 percent, as closures were offset by restart of previously suspended production and the addition of 12 million tonnes of new capacity. The total crude steel output was at 808 million tonnes for 2016.

]]> (Sandy Williams) International Steel Mills Tue, 14 Feb 2017 10:32:07 -0500
Will Chinese Steel Prices Correct in Coming Weeks?

The following article is from one of our close iron ore & steel trading friends located in Asia:

The market has changed or is in turmoil, if you want to call it that, here in SE Asia and China continues to out price themselves whereas the China domestic indicators lead to a different scenario.

Ore stocks in Chinese ports are again at historic levels 107 Million MT, all the Small to Medium Scrap based steel mills are closed now. Integrated mills are running at 60-70 percent capacity and basically giving away their normal SE Asian market shares to new players.

For an example, Turkey has sold 40K of Debars (rebar) to Hong Kong at USD420/mt CNF FO and 12mm up to 40mm diameter Gr. 500 Debars. Singapore has also purchased Turkish Debars at a slightly lower level due to freight, but 50K and same quality and sizes. All March shipments. These were concluded mid last week and if you want to buy the same for April shipment, the price level is now USD415/mt FOB ST LSD and all of these cargos were sold on Theoretical weight, not Actual weight.

]]> (John Packard) International Steel Mills Tue, 14 Feb 2017 08:56:40 -0500
Oil and Gas Prices and Rotary Rig Counts through February 2017

The prices of oil and natural gas drive the consumption of oil country tubular goods (OCTG) and related steel products. The energy markets represent a large portion of the hot rolled coil used to make welded tubular goods as well as equipment used to drill and pump oil and natural gas.

]]> (Peter Wright) Energy Mon, 13 Feb 2017 18:53:50 -0500
Construction Firms Getting Squeezed by Costs

The Associated General Contractors of America caution that rising construction costs, coupled with restrictions on imported construction materials, may drive up prices for infrastructure and residential and nonresidential buildings.  A long-term infrastructure funding mechanism will provide more benefit than Buy America policies, says the Association. A press release from AGC follows.

]]> (Sandy Williams) Construction Mon, 13 Feb 2017 15:47:31 -0500
JSW Steel Bids for Bhushan Steel

JSW Steel has presented a bid to acquire Bhushan Steel for approximately $3.75 billion and gain a 55 percent majority stake. The deal includes taking over Bhushan Steel’s debt which is estimated at $6.68 billion.

]]> (Sandy Williams) International Steel Mills Mon, 13 Feb 2017 12:46:45 -0500
December Heating and Cooling Equipment Shipment Data

Below is the latest data release issued by the the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) regarding residential and commercial heating and cooling equipment shipments through December 2016. You may read the press release on their website here.

]]> (Brett Linton) Appliances Mon, 13 Feb 2017 10:42:49 -0500
Final Thoughts

We have a number of articles in tonight's newsletter about China and Chinese steel and iron ore prices. Why do we pay so much attention to one country? China controls 50 percent of the world's steel production. The country has somewhere around 300 million metric tons (330 million net tons) of excess capacity. They have been trying to export their way out of the hole that we could see growing and in the process save jobs and keep the masses from focusing any discontent on the government. China is a problem that will not easily go away and one we must watch carefully. We have to expect China to take the actions taken by the United States to the WTO and, what will happen to the domestic steel industry should the WTO rule against the U.S.?

]]> (John Packard) Final Thoughts Mon, 13 Feb 2017 08:00:00 -0500
Global Trade in HRC and CRC through Q3 2016

We believe that to understand the forces acting on the US steel import market it is necessary to examine global trade flows. We present here episode one of our investigation into the global trade of hot rolled coil and cold rolled coil and the US’s position in the big picture. The source of this data is the Iron and Steel Statistics Bureau in the UK. Data is collected from exporters and from importers. Since there are very many fewer exporting nations than importers and since the exporters generally have more advanced reporting systems (unless they lie!) we have only analyzed export based data then reversed it to get the import flow. Data is reported about 10 weeks after a quarter closes. Rather a long delay but it takes time for the ISSB to receive all the data as nations have different reporting speeds. Even with that delay we believe the data is valuable in providing an overall direction and volume of trade flows.

]]> (Peter Wright) Imports Sun, 12 Feb 2017 17:02:38 -0500
Alan Beaulieu a Keynote Speaker at 2017 SMU Steel Summit Conference (195 days to go)

Dr. Alan Beaulieu of the Institute for Trend Research will be a keynote speaker at this year’s SMU Steel Summit Conference to be held in Atlanta at the end of August. Dr. Beaulieu is a crowd favorite and will be joining us for the third consecutive year due to the quality of his information and his use of humor to help convey his message on what would otherwise be a dry topic.

The steel executives attending a SMU Steel Summit Conference are interested in understanding today’s economy but, they are more interested in knowing what the future holds for the economy and more importantly for their industry. Dr. Beaulieu and ITR have a 94.7 percent accuracy rate when forecasting four quarters into the future.

]]> (John Packard) SMU Steel Summit Conference Sun, 12 Feb 2017 16:29:14 -0500
ArcelorMittal NAFTA Segment Results Slip in Q4

ArcelorMittal NAFTA segment results declined in fourth quarter 2016. Steel shipments decreased by 6.6 percent to 5 million tonnes from third quarter driven by an 8.5 percent decrease in flat volumes due to destocking in the United States.

NAFTA sales were down 11.1 percent from the prior quarter to $3.8 billion due to lower average steel price and shipment volumes.

]]> (Sandy Williams) ArcelorMittal Sun, 12 Feb 2017 15:02:24 -0500
ArcelorMittal Comments on Demand and Europe Projects

ArcelorMittal said it expects global apparent steel consumption to grow between 0.5 and 1.5 percent in 2017, compared to 1.0 percent growth last year.

Underlying demand is expected to pick up in Europe supported by the automotive market, but apparent demand growth in the region is forecast at a modest 0.5-1.5 percent compared to 2 percent in 2016. ArcelorMittal expects growth in auto sales but weak construction growth.

]]> (Sandy Williams) ArcelorMittal Sun, 12 Feb 2017 13:03:09 -0500
Comparison Price Indices: Minor Adjustments

We saw some “minor” slippage in flat rolled steel pricing this past week. When reviewing Platts (SteelBenchmarker did not report prices this past week) and our own steel indices we saw movement in hot rolled, cold rolled as stable, movement in galvanized and Galvalume and plate were stable.

]]> (John Packard) Price Indices Sun, 12 Feb 2017 12:11:34 -0500
US Steel Restarting Hot Mill at Granite City

The US Steel Granite City hot strip mill is back in action as promised. US Steel has called 225 employees back to work to restart the facility’s idled hot mill.

For the present, only the hot mill will be restarted which reheats steel slabs, sourced from other US Steel mills, to process them into coil. Granite City has the capability to produce its own steel, from melting iron ore to the finished product, but will not resume steelmaking as of now. Granite City Works has an annual raw steelmaking capability of 2.8 million tons and two blast furnaces.

]]> (Sandy Williams) U.S. Steel Sat, 11 Feb 2017 18:17:34 -0500
2016 Apparent Steel Supply Down 4.2 Percent Over 2015

According to the latest data released from the U.S. Department of Commerce and the American Iron and Steel Institute, apparent steel supply for the month of December 2016 was 8,622,171 net tons. Apparent steel supply is calculated by adding domestic steel shipments and finished US steel imports, then subtracting total US steel exports.

]]> (Brett Linton) Apparent Steel Supply Fri, 10 Feb 2017 15:25:35 -0500
Final Thoughts

My apologies as I have been consumed lately with making sure we have a program staffed with the absolute best speakers at this year's SMU Steel Summit Conference. This will be the first year we will have a manufacturer's panel. The idea is to have three CEO's talk about how they see business, trade and anything else that they feel would be of value to the other manufacturers, service centers, steel mills, trading companies, etc. We have two CEO's confirmed and are working on getting our third. Both of the confirmed CEO's came based on the recommendations of our readers. Got someone out there that you think has something to offer? You can reach me at: 800-432-3475 or by email at:

In case you missed the data we shared with everyone at the end of the Alan Beaulieu article. Based on the survey taken during the conference last year, 33 percent of the attendees were manufacturing companies, 31 percent service centers, 11 percent were "not defined", 8 percent financial institutions, 7 percent steel mills, 7 percent transportation and 3 percent raw material suppliers.

]]> (John Packard) Final Thoughts Fri, 10 Feb 2017 08:00:00 -0500
Foreign Steel: Getting Expensive

Even though the U.S. Department of Commerce is reporting foreign steel imports at high levels, imported steel is getting more expensive and, in some cases, getting harder to find.

SMU sources, both steel trading companies and buyers of foreign steel here in the United States, are expressing reservations about the future of foreign steel imports. This is not to say we should expect imports to move to zero but steel buyers should be prepared for tighter supplies of certain products and higher prices.

The circumvention complaint against Vietnam/China is having an impact on steel mills in Asia and on traders here in the United States where requests for certification of no Chinese substrate are becoming common place.

A trader located on the U.S. West Coast told us earlier today, “In the West I am seeing the CR basically coming from Thailand and Australia.  Mills with the most activity are BlueScope/Australia, Starcore in Thailand, and Thai Cold Rolled (TCR) Thailand. Hot Rolled in the West is basically Hyundai out of Korea, BlueScope out of New Zealand and some from Mexico.  That is basically the only HR being offered at this time. Galvanized is all over the place: Thailand, Japan, Taiwan, UAE, limited Korean.  As you mention Vietnam is back.”

The trader went on to say, “Thailand and UAE, I believe are not using Chinese material for USA business.  The business we do today specifically states no Chinese substrate allowed.”

]]> (John Packard) Imports Thu, 09 Feb 2017 16:58:30 -0500
Cliffs: Sanity Is Back in the Iron Ore Market

“Sanity is back in the seabourne iron ore market,” said Cliffs Natural Resources CEO Lourenco Goncalves in comments during the Cliffs earnings call on Thursday. After the departure of three key executives in the Australian ore market, iron ore prices doubled and Rio Tinto, Vale and BHP are exhibiting disciplined behavior which will support strong iron ore prices for 2017, said Goncalves.

]]> (Sandy Williams) Iron Ore Thu, 09 Feb 2017 14:05:35 -0500
Shorter Lead Times, Auto Inventories Affecting Futures Markets

The following article on the hot rolled coil (HRC) steel and financial futures markets was written by Jack Marshall of Crunch Risk LLC. Here is how Jack saw trading over the past week:

]]> (Jack Marshall) Hot Rolled Futures Thu, 09 Feb 2017 15:00:39 -0500
Algoma Union Calls for Strike Vote

USW Local 2251 at Essar Steel Algoma has called a strike vote for Tuesday, February 28. The union says it has no choice after withdrawing a complaint with the Ontario Labour Relations Board and accepting that the collective agreement contract expired on July 31, 2016.

]]> (Sandy Williams) Essar Steel Algoma Thu, 09 Feb 2017 13:09:50 -0500
Final December Imports at 2.7 Million Tons

The U.S. Department of Commerce released the Final Census Data for foreign steel imports for the month of December 2016. We now have the 12-month moving average (12MMA) for calendar year 2016 as well as the 3-month moving average for the last 3 months (4Q) 2016. The January numbers are based on license data which can vary from the final numbers so we refer to it as "trending."

]]> (John Packard) Imports Thu, 09 Feb 2017 12:46:06 -0500
Flat, Long, and Semi-Finished Imports through January 2017

Licensed data for January was reported by the Steel Import Monitoring System of the US Commerce Department on January 7th. An explanation of the methodology that we at SMU use to analyze the trade data is given at the end of this piece. All volumes in this analysis are reported in short tons. Total rolled product licensed imports in the single month of January were 2,231.154 tons with a three month moving average (3MMA) of 2,112,384 tons. We prefer not to dwell on single months results because of the extreme variability that can occur in individual products. In the comments below we use only three month moving averages because normally this presents a more representative picture.

]]> (Peter Wright) Imports Thu, 09 Feb 2017 11:21:39 -0500
US Steel Exports Remain Low in December

December steel exports totaled 726,847 net tons (659,385 metric tons), down 0.3 percent over November but up 0.2 percent from December 2015. This is the lowest export level seen since December 2015 when 658,362 tons were exported. Total December figures are below the thee month moving average (average of October, November, and December 2016 figures) and below the twelve month moving average (average of January 2016 through December 2016 data). Here is a breakdown of flat rolled and plate exports:

]]> (Brett Linton) Exports Thu, 09 Feb 2017 10:15:22 -0500
Dodge Momentum Index Up 3.9 Percent in January

The January Dodge Momentum Index gained 3.9 percent to register at 142.6 from a revised reading of 137.3 in December.

The index is a monthly measure of the initial report for nonresidential buildings in planning and leads nonresidential construction spending for buildings by a full year. The index is considered an indicator of future construction growth.

]]> (Sandy Williams) Construction Wed, 08 Feb 2017 19:40:47 -0500
MoMo Index Has HRC Pricing Today Barely Higher than 12-Week Average

The Steel Market Update (SMU) Steel Price Momentum Index (MoMo) for hot rolled steel in the United States remained positive for the twelfth consecutive week, following a long 17 week negative streak. MoMo is a trailing indicator and shows the relationship between the current U.S. hot rolled coil price movements against the previous 12-week average price as a percentage. A positive MoMo index indicates hot rolled steel prices are moving in an upward direction compared to the previous 12 week period, while a negative index number indicates a downward direction in prices.

MoMo should not be confused with the SMU Price Momentum Indicator which is a forward looking indicator. The SMU Price Momentum Indicator is currently at Higher indicating that steel prices are expected to rise over the next 30 days.

]]> (Brett Linton) SMU Momentum (MoMo) Model Wed, 08 Feb 2017 10:41:37 -0500
Final Thoughts

The Nucor Louisiana DRI plant is down for 4-5 weeks according to information just received by SMU from Nucor spokesperson Katherine Miller. Here is what she told us: "We recently had an equipment failure that has temporarily stopped production at our Louisiana DRI plant. Due to the nature of the DRI process and the cooling time required to examine the equipment, we do estimate that it will take 4-5 weeks to make the necessary repairs.  Our Trinidad DRI faculty continues to operate at full capacity and we anticipate no disruptions in our raw material pipeline.  This stoppage is also not expected to disrupt production at any of Nucor’s steel mills, nor impact our 180 teammates who work at the facility."

One of our sources who has contacts close to the plant advised is that the outage is "no big deal." We will report more once we have a better understanding of the issues with the facility.

]]> (John Packard) Final Thoughts Wed, 08 Feb 2017 08:00:00 -0500
SMU Price Ranges & Indices: Looking for Orders

Steel buyers are telling Steel Market Update that there are a few steel mills "looking for orders" and that flat rolled steel prices are "somewhat negotiable with tons" but, otherwise, the steel mills are doing a good job of holding the line on prices. We have seen a couple of drops in pricing due to the lower end of our range getting nicked and a tightening of the spread between the low and the high numbers being asked in the marketplace.

One steel executive told us today, "Its getting a little weaker. We are being approached by mills we normally don't do business with looking for tons. It is very unusual for prices to back off in early February." He then went on to point out an observation that we have an article on in tonight's newsletter, "Scrap appears to be firming back up."

Steel Market Update continues to have our Price Momentum Indicator pointing toward a Neutral pricing environment over the next 30 days. There has been some minor erosion of prices but we do not expect a sharp decline during the next 30 days. Having said that one mill told us today when asked about Big River Steel becoming a competitor for their business, "It is what it is, and well, gotta battle and out do your competitors anyway. This is not patty-cakes!"

Another executive at a different mill told SMU, "[Market Price] is, "Flat...stable. I believe big tons can get folks a slightly better deal. Nobody super excited to load up right now. We believe this is the lull before the Spring market hits... Late March/April lead times should bring better apparent demand."

]]> (John Packard) Price Indices Tue, 07 Feb 2017 18:18:22 -0500
The Sky is Not Falling, Just Some Nuts Rolling on the Ground...

The following article is the opinion of Steel Market Update (SMU) founder and publisher, John Packard.

There is a new kid in town, his/her name is Big River Steel. No other steel mills like BRS because they are taking market share and, well, everyone wants to keep all of their toys. Big River Steel Arkansas location is very close to two Nucor facilities and not that far away from SDI Columbus or US Steel Granite City. For the month of January BRS produced 63,000 tons of hot rolled. Usually new mills "ramp up" production so the expectation is they will produce more steel in February, March, April...well, you get the picture.

There is another new kid in town, well almost in town, Acero Junction is beginning to produce hot rolled off the old Mingo Junction mill on the border of Ohio and West Virginia. In the not too distant future Acero Junction will be looking to gain market share from someone (probably NLMK, Nucor, SDI Butler).

Fear is running rampant (at least in the financial community) and the sky is falling! The sky is falling!

No, the sky is not falling. But, some of the nuttiness that exists in the steel industry continues.

Flat rolled steel prices rose $160 per ton since the mills first started announcing price increases in late October 2016 (hot rolled was averaging $470 per ton) until late January when it hit $630 per ton. That is a pretty good run over a 13-week period. The domestic mills collected $160 per ton of the $180 per ton announced and, I bet there are areas where they collected the full $180 and maybe even more depending on where a customer was when the increases started flowing.

Now it is the first full week of February and hot rolled has come off its $630 high by $20 per ton to $610 per ton. Still a pretty good number compared to the $470 we were reporting in late October 2016.

It is even more amazing when you consider that a brand-new 1.6 million ton, steel mill (when fully operational) came to life in December and in its first full month of production set a record (according to SMS, the equipment manufacturer for the mill) of 63,000 tons of hot rolled coil. Soon Big River Steel (BRS) will begin running cold rolled and galvanized as well as hot rolled. Yet, our sources are advising the offer prices for tonnage out of BRS is $600 per ton on hot rolled and $810 per ton on cold rolled… They are within our SMU index HRC steel price range and they are fighting to gain market share.

]]> (John Packard) Steel Prices (North America) Tue, 07 Feb 2017 17:42:49 -0500
Surprise! Scrap Prices Firming as February Negotiations Continue

The ferrous scrap markets have been all about doom and gloom up until the past couple of days. Obsolete grade and shredded scrap were reported trading down $25 per ton in Brazil. Prime grades were down $10 per ton. Our sources were telling us export prices were down and the exporters off the east coast were offering down prices into other areas of the country.

Now we are hearing of export trades on 80/20 mix to Turkey up $6 per ton and there is a question as to whether the Turkish buyers will be back for more in the coming days.

We are also hearing that the exporters may have misread the market and the actions of a very few exporters may have influenced the original deals done in the market at the beginning of this month.

On Monday evening, we heard from one of our scrap sources who provided us with a “heads up” on the market. We were told, “…I think you may want to focus on the changing market direction which will come into focus in the next few days.  The market has gone from down $40 to down $25-30 for obsolete grades and from down $15 to sideways for good quality bush and bundles.  Turkish sales have stabilized and momentum is on the supplier's side. There is consensus building in the US domestic market that March prices will be no worse than February. As of this writing many dealers are reducing tons offered for Feb and asking for more money than offers given last week.”

]]> (John Packard) Scrap Prices Tue, 07 Feb 2017 17:06:26 -0500
AISI Releases Policy Priorities, Will Push Agenda to Hill, Administration

WASHINGTON, D.C., Feb. 6, 2017 – The American Iron and Steel Institute (AISI) Board of Directors has approved a public policy agenda outlining the Institute’s aggressive pro-manufacturing policy strategies to guide advocacy for the upcoming year and highlight importance of the steel industry to the success of the American economy.

“The impact public policies have on manufacturers must be carefully considered to ensure economic growth and our national security. Our 2017 Public Policy Agenda highlights a concerted effort on behalf of members of the North American steel industry to combat foreign unfair trade practices, create jobs, highlight our innovations and sustainability, and strengthen the manufacturing base,” said Thomas J. Gibson, AISI president and CEO. “We will be sharing our priorities with policymakers and government leaders, and look forward to working together to turn obstacles into opportunities.”

Highlights AISI priorities for 2017 include:

]]> (Sandy Williams) Other Indexes/Organizations Tue, 07 Feb 2017 15:54:13 -0500
Daniel Pearson, Former Chairman of the ITC to Speak at 2017 Steel Summit Conference

Steel Market Update has been promising a second-to-none steel conference experience for those who will be attending the SMU Steel Summit Conference in Atlanta at the end of August. Joining us for the first time will be Daniel Pearson, Senior Fellow, Cato Institute, Herbert A. Stiefel Center for Trade Policy Studies. Dan will be part of a program segment dedicated to trade issues from various perspectives. SMU has seen Daniel speak in the past and we feel he will bring a wealth of experience to many issues which will be discussed during the course of our 3 day conference.

Daniel spent ten years on the U.S. International Trade Commission (ITC) including a two-year term as its chairman. The ITC is one of the governing bodies ruling on antidumping and countervailing duty trade cases.

]]> (John Packard) SMU Steel Summit Conference Tue, 07 Feb 2017 12:47:02 -0500
Can Wilbur Ross Engineer a Turnaround at Commerce?

The following article was originally published by Daniel Pearson, Senior Fellow at the Cato Institute on January 18, 2017. Mr. Pearson will be one of our speakers at this year's SMU Steel Summit Conference:

Wilbur Ross has accomplished impressive business turnarounds during his career. His efforts in the steel, textile and automotive parts industries demonstrate a genuine talent for reorganizing failing operations and putting them back onto their feet. When he becomes Secretary of Commerce, Ross may face his greatest turnaround challenge ever.

]]> (Daniel Pearson) Economy Tue, 07 Feb 2017 11:43:32 -0500
Weekly Raw Steel Production Steady at 1.7 Million Tons

For the week ending February 4, 2017, the American Iron & Steel Institute (AISI) estimated the U.S. steel industry produced 1,723,000 net tons of raw steel, a 0.7 percent decrease over the previous week but a 3.5 percent increase over the revised rate from the same week one year ago. The estimated capacity utilization rate for steel production is 72.7 percent, down from 73.3 percent last week but up from 71.2 percent this time last year.

]]> (Brett Linton) Weekly Raw Steel Production Tue, 07 Feb 2017 09:42:46 -0500
Essar Algoma Gets Another 30 Days to Finalize Sale

Essar Steel Algoma announced on Tuesday that it has received an extension to its Debtor-in-Possession financing facility (DIP).

The Ontario Superior Court of Justice approve the amendment and extension on January 31, extending the DIP to March 31 with the option of a further thirty day extension. Stay of proceedings has also been extended to March 31.

]]> (Sandy Williams) Essar Steel Algoma Mon, 06 Feb 2017 17:18:28 -0500
Chinese Steel Market Analysis for the Week Ending February 5th

The following analysis of the steel markets in China is from Beijing Metal Import & Export Co.,Ltd and is being reproduced by Steel Market Update with permission:

Please be informed that we are back in our office on Feb 03. Very sorry we didn’t update on the China steel market for more than 2 weeks due to our Spring Festival. Here is our new steel market report (Jan 17 - Feb 05, 2017), should you have any questions on the China steel market, please feel free to contact us.

Before China reopened on Feb 03, steel market kept stable as no real transactions, there was no change EXW prices were higher than spot prices.

]]> (John Packard) International Steel Mills Mon, 06 Feb 2017 13:50:48 -0500
Galvanize Line 2 Restarted at Sharon Coating

NLMK USA has restarted its #2 hot-dip galvanizing line at the Sharon Coating facility in Pennsylvania in response to increased domestic demand.

]]> (Sandy Williams) NLMK USA Mon, 06 Feb 2017 10:13:53 -0500
Final Thoughts

Over the next few weeks we will begin rolling out our program and our speakers for this year’s SMU Steel Summit Conference. I am very excited as the program is coming together very well and I believe this will be our best conference to date. We have taken the suggestions received last year as well as in previous years and we have tried to incorporate into our program as many of our past attendee suggestions as possible without losing the integrity and quality of our program.

We will once again have a “Pre-Summit” program which will be held at the Atlanta Airport Marriott Gateway Hotel on Monday afternoon, August 28th. We will be advising the topic soon but, for those who are planning on attending our conference, we recommend that you plan your travel so that you are at the hotel around 1 to 2 PM so you can participate in our afternoon “Pre-Summit” program and be available for our “unofficial” networking cocktail party in the lounge on the main floor of the hotel. Last year we had a more than one hundred steel people in the lobby and we expect this year to be even larger.

Will this year’s SMU Steel Summit address some of the political and trade issues affecting manufacturing, steel distributors, trading companies and steel mills – you betcha.

]]> (John Packard) Final Thoughts Mon, 06 Feb 2017 08:00:00 -0500
Service Center Spot Steel Prices Peaking?

One of the theories we hold at Steel Market Update is as cycles ebb and flow so do the flat rolled steel spot prices service centers charge their customers. When markets are weak, distributors lower steel prices in order to move off older high-priced inventories and to generate cash. There comes a point when so many distributors are “dumping” steel into the market, driving down prices and margins, that everyone begins looking to the steel mills for relief. That relief comes in the form of price increase announcement(s) which the steel service centers will support. SMU calls this the point of capitulation.

When the cycle is reversed and the price increases have been flowing out of the domestic steel mills and the service centers support those increases by raising spot steel prices to their customers, there comes a point where prices peak. The flood of inventory buying by the service centers is over and the distributors now must be concerned about the inventories on their flood and coming in. If the balance of inventories shifts back toward an over-supply situation, the distributors respond by lowering spot prices to their customers.

]]> (John Packard) Service Centers/Distributors/Wholesalers Sun, 05 Feb 2017 17:40:12 -0500
Early Scrap Down $25-$40 on Shred/Obsolete and $10-$35 on Primes

Over the weekend, we were able to discuss the status of ferrous steel scrap negotiations for February with a couple of scrap dealers as well as one individual associated with the pig iron markets.

The Detroit areas mills were the first to settle and the decline in shred and obsolete grades was not as dramatic as some thought it could be. One of our sources told us, “Regarding the scrap market, looks like the Detroit area bills came out down $25 for cut grades and shredded but only down $10 for prime.  This intelligent move caught Nucor and SDI by surprise.  Those mills are trying to force the market down $30 across-the-board.  Whether they'll be successful remains to be seen.”

One of our sources on the east coast provided some detail to a couple of the markets and thoughts on what will happen from here:

]]> (John Packard) Scrap Prices Sun, 05 Feb 2017 16:13:23 -0500
SMU Survey Results: More Price Announcements & Have Prices Peaked?

Last week Steel Market Update (SMU) conducted our early February flat rolled steel market trends analysis which is just a long way of saying our survey. Our analysis began on Monday and ended on Thursday afternoon. We covered a large number of topics with manufacturing companies, service centers, steel trading companies, steel mills and suppliers to the industry responding.

We asked those responding to our request to participate in our trends analysis if, as a group (all respondents), they believe there would be more flat rolled price announcements between last week and the end of February. We found a slight majority are of the opinion that there would not be any more price announcements in February. Fifty-nine percent of our respondents did not believe there would be further announcements while forty-one percent thought announcements would come.

]]> (John Packard) SMU Steel Survey Results Sun, 05 Feb 2017 15:12:31 -0500
January Foreign Steel Import Trend at 2.7 Million Tons

The U.S. Department of Commerce provided updated license and census data which indicates foreign steel imports are trending lower. December imports of foreign steel are totaling 2,685,641 tons while January is trending toward 2.7 million tons based on license data through the end of the month.

]]> (John Packard) Imports Sun, 05 Feb 2017 13:01:16 -0500
China Sees Protectionism Leading to Trade Wars

Following the DOC determination of AD/CVD duties on imports of stainless steel products, China issued a statement expressing its disappointment that the United States continues to follow its path of protectionism.

“China is disappointed that the United States continued to launch high taxes on Chinese steel export products and calls into question the unfair way the US conducted its investigation,” said Wang Hejun, head of the trade remedy and investigation bureau of the Ministry of Commerce, on Saturday.

]]> (Sandy Williams) Trade Cases Sun, 05 Feb 2017 12:39:43 -0500
2016 Raw Steel Production 0.5% Lower than 2015

The American Iron & Steel Institute (AISI) recently reported final U.S. raw steel production estimates for the month of December 2016. The monthly estimates are different than the weekly estimates we report in our Tuesday issues; the AISI bases the monthly estimates on over 75 percent of the domestic mills reporting vs. only 50 percent for the weekly estimates.

]]> (Brett Linton) Monthly Raw Steel Production Sun, 05 Feb 2017 11:25:57 -0500
Confrontation Among Essar Steel Algoma Stakeholders

In the last week there have been four statements released regarding the restructuring of Essar Steel Algoma. The first began last weekend with an appeal by former parent company Essar Global to be readmitted to the bidding process for Algoma.

Essar Global criticized the Sales and Investment Solicitation Process (SISP) noting that KPS Capital dropped out of the running and the current bid by the Term Creditors seemed stuck in quagmire. Essar asserts that is was a “responsible owner” who has forged “good relationships with employees, community representatives, and other stakeholders” and should be considered as a potential buyer in bidding process.

]]> (Sandy Williams) Essar Steel Algoma Sun, 05 Feb 2017 10:54:40 -0500
January Construction Employment at Highest Level Since 2008

Construction employment was at its highest level since 2008 in January, according to data analyzed by the Associated General Contractors of America. The total could be much higher if there were more skilled workers available to hire, said AGC chief economist Ken Simonson. The press release from AGC follows:

Construction employment increased by 36,000 jobs in January to the highest level since November 2008 as employers increased pay in an effort to address a chronic worker shortage, according to an analysis of new government data by the Associated General Contractors of America. The association urged public officials to strengthen training and education programs to prepare more workers for careers in the high-paying construction field.

]]> (Sandy Williams) Construction Sun, 05 Feb 2017 10:04:10 -0500
Comparison Price Indices: Flat to Slight Slippage

Flat rolled steel prices may have peaked based on the results of the two steel indexes followed by Steel Market Update who reported flat rolled steel prices this past week.

]]> (John Packard) Steel Prices (North America) Sat, 04 Feb 2017 16:48:51 -0500
Active Oil & Gas Rig Counts Continue to Rise

According to Baker Hughes data from February 3, 2017, the U.S rig count for the week was 729 rigs exploring for or developing oil or natural gas. This is up 17 rigs compared to last week, with oil rigs up 17 to 583 rigs, gas rigs unchanged at 145 rigs, and miscellaneous rigs unchanged at 1 rig. Compared to this time last year, the 729 count is up 158 rigs, with oil rigs up 116, gas rigs up 41, and miscellaneous rigs up 1.

]]> (Brett Linton) Energy Fri, 03 Feb 2017 13:15:03 -0500
SMU Price MoMo Index Losing Speed

The Steel Market Update (SMU) Steel Price Momentum Index (MoMo) for hot rolled steel in the United States remained positive for the twelfth consecutive week, following a 17 week long negative streak. MoMo is a trailing indicator and shows the relationship between the current U.S. hot rolled coil price movements against the previous 12-week average price as a percentage. A positive MoMo index indicates hot rolled steel prices are moving in an upward direction compared to the previous 12 week period, while a negative index number indicates a downward direction in prices.

MoMo should not be confused with the SMU Price Momentum Indicator which is a forward looking indicator. The SMU Price Momentum Indicator is currently at Higher indicating that steel prices are expected to rise over the next 30 days.

]]> (Brett Linton) SMU Momentum (MoMo) Model Fri, 03 Feb 2017 10:55:10 -0500
Final Thoughts

It is Super Bowl Sunday so I am going to keep this as short as possible. Everyone needs to remember that I lived in Atlanta for 34 years, having just moved permanently to Florida a little more than a year ago. Let's hope for a good game and great commercials... Go Falcons!

]]> (John Packard) Final Thoughts Fri, 03 Feb 2017 08:00:00 -0500
HR Price Drops & Price Momentum Indicator Now at Neutral

Steel Market Update (SMU) has been struggling to get a clear view of the current market situation as we attempt to identify which direction we see flat rolled steel prices going from here. We have been receiving mixed messages over the past two weeks and we have been advising our readers to remain vigilant and stay close to your suppliers as well as those who are providing you independent market intelligence.

So, this is how we are seeing the flat rolled steel markets right now. Benchmark hot rolled has been weakening over the past one to two weeks. Not every mill is reacting to the market and not every plant within a mill group is reacting the same. We have seen multiple price points indicating hot rolled coil base prices in the $600-$610 with some reporting spot prices (with tons) under $600 per ton.

We are changing our range on hot rolled pricing to $600-$640 per ton with an average of $620 per ton. This is $5 per ton lower than what we reported on Tuesday evening and $10 per ton lower than what we reported last week.

]]> (John Packard) SMU Price Momentum Indicator Thu, 02 Feb 2017 16:00:45 -0500