News - Steel Market Update - Steel Market Update Fri, 26 May 2017 16:49:06 -0400 Joomla! - Open Source Content Management en-gb Section 232 Testimony Heavily Weighted Toward Domestic Industry

The Chinese, Russians, Turks, Vietnamese, Koreans and to a lesser extent the Taiwanese ears were burning Wednesday after the “bad-mouthing” they got at the Section 232 hearing on steel. Of the 37 scheduled speakers 9 domestic companies/organizations along with four foreign entities (Russia, China, Ukraine and Eurofer) spoke on behalf of allowing foreign steel without restrictions (other than AD/CVD restrictions). The balance (24 companies/organizations) were there to support the steel industry and to call for restrictions against foreign steel products.

At the beginning of the hearing Secretary of Commerce, Wilbur Ross spoke about the questions the DOC has been charged to answer:

•    Is steel being imported into this country impairing our national and economic security?

If the DOC finds foreign steel imports threaten our security, the DOC will recommend appropriate action to the president.

Key questions Wilbur Ross raised that need to be answered include:

]]> (John Packard) Trade Cases Thu, 25 May 2017 18:13:18 -0400
Bill Gaskin of PMA Fills Out SMU Steel Summit Trade Panel

It has been the goal of Steel Market Update (SMU) to provide as wide a range of opinions and views of the industry as possible during our SMU Steel Summit Conference. Trade is once again on the tip of everyone’s tongue and we are broaching the subject in many ways at this year’s Conference.

We have been working to find someone who can speak on behalf of the manufacturing community and participate in our “What is Fair and Free Trade?” panel. We reached out to many manufacturing associations and we are delighted to announce William Gaskin, President Emeritus (he is retiring at the end of this month) of the Precision Metal Forming Association (PMA). Mr. Gaskin served as President of the PMA for the past 17 years and has been involved with the Association for 40 years.

]]> (John Packard) SMU Steel Summit Conference Thu, 25 May 2017 16:52:03 -0400
Unintended Consequences of Trade Actions

As CEOs and association representatives presented their arguments for why the administration’s Section 232 action on steel imports should go forth, AIIS international Trade Counsel Gary Horlick talked about the unintended consequences of such actions.

AIIS represents 108 members that include traders, freight forwarders, stevedores, shippers, importers, exporters, railroads, port authorities, unions and other logistics companies. In total, members account for 80 percent of basic steel products imported into the United States.

“The purpose of Section 232 is to ensure that the U.S. military can obtain the types of products it needs in the quantities it needs when it needs them. It was not intended to provide overall protection for U.S. industry for other purposes – there are lots of other statutes for that purpose,” said Horlick in his opening statements.

The long-term prospects for the steel industry are good, said Horlick, pointing to new facilities like Big River Steel and the growth of the electric arc furnace sector. “Individual companies making individual products may change their product mix from time to time, but there is no sign that they cannot make the products our military requires as needed,” he said. An analysis under the Section 232 statue also requires looking at capacity available to the U.S. military from Canada and Mexico and other ally countries, said Horlick.

Section 232 has only been used successfully twice for import protection and in both cases it was to restrict the import of crude oil. Between 1959 and 1973, using a predecessor to Section 232 largely for political reasons, the United States imposed quotas on the import of crude oil. It excluded Canada but refused an exemption for close ally Venezuela. Following the rebuff from the U.S., Venezuela’s Minister Alonso flew to Saudi Arabia and founded OPEC.

]]> (Sandy Williams) Trade Cases Thu, 25 May 2017 16:37:34 -0400
Hot Rolled Futures Flattening

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:


Flattening of HR futures curve due to decline in nearby futures prices generates heavy trading.

It has been an active week for HR futures as almost 80,000 ST of HR futures were traded. Clearly good selling interest was met by some strong buying of the latest price dip. In the past week while the index that the CME uses only dropped by $2 to $605/ST[$30.25/cwt] for HR, the futures settlements declined $11/ST to $15/ST in the near months flattening the futures curve considerably and generating a lot of interest and trades.

]]> (Jack Marshall) Hot Rolled Futures Thu, 25 May 2017 14:54:30 -0400
Nucor to Build Galvanizing Line at its Kentucky Sheet Mill

CHARLOTTE, N.C., May 25, 2017 /PRNewswire/ -- Nucor Corporation (NYSE: NUE) announced today that it is investing an estimated $176 million to build a hot band galvanizing and pickling line at its sheet mill in Ghent, Kentucky. The new galvanizing line will expand Nucor Steel Gallatin's product capabilities and have an annual capacity of 500,000 tons.

"The addition of a hot band galvanizing line at Nucor Steel Gallatin supports our automotive growth strategy. This project will allow us to move into segments of the automotive market we currently do not serve," said John Ferriola, Chairman, CEO and President. "We have been growing our share of the automotive market and this project will help us continue that trend. In addition, this line will fully satisfy a key need in the marketplace for high-quality, hot-rolled galvanized steel."

]]> (Sandy Williams) Nucor Thu, 25 May 2017 13:11:29 -0400
Foreign vs. Domestic Hot Rolled Price Comparison in May 2017

The following calculation is used by Steel Market Update to identify the theoretical spread between foreign hot rolled steel import prices (delivered to USA ports) and domestic (USA) hot rolled coil prices (FOB Domestic mills). We want our readers to be aware that this is only a "theoretical" calculation as freight costs, trader margin and other costs can fluctuate ultimately influencing the true market spread.

Our primary numbers for this exercise are from Platts as we compare 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... SteelBenchmarker is the secondary data provider of foreign hot rolled coil prices and is noted further down in this article.

]]> (Brett Linton) International Steel Prices Thu, 25 May 2017 12:43:03 -0400
Galvalume is Covered Under CORE & Circumvention Trade Complaints

Steel Market Update (SMU) has been contacted by end users, distributors and steel mills regarding an article published by another trade publication on Galvalume. The article, which was published on Thursday, May 18, 2017, quoted Keith Medick, president and CEO of Union Corrugating Company, as he made the point that there is not enough light gauge Galvalume production in the United States to meet demand. Steel Market Update and industry consultant, Paul Lowrey of Steel Research Associates, will tackle that subject (Galvalume and production capabilities - and misunderstandings) in a future issue of Steel Market Update.

First, however, we have been asked by steel mills, distributors and end users to comment on a statement that was made by the author of the trade publication article regarding Galvalume and trade suits. “Galvalume... was not included in a US trade case last year targeting coated flat-rolled from China, India, Italy, South Korea and Taiwan, nor was it included in a duty-circumvention investigation targeting cold-rolled and coated Flat-rolled steel from Vietnam.”

That statement is incorrect and has created some confusion in the marketplace.

]]> (John Packard) Galvalume Thu, 25 May 2017 11:44:09 -0400
Foreign Testimony at Section 232 Hearing

The Section 232 Investigation of steel imports on national security hearing was held on Tuesday. The testimonies included four representatives of foreign governments: China, Russia, the European Union, and Ukraine. Not surprising, none were in support of new import restrictions by a Section 232 action.

China was represented by Yu Gu, First Secretary of the Ministry of Commerce. Yu said, “The Ministry of Commerce believes there is no evidence that steel imports threaten to impair US national security.” He went on to add that the U.S. defense and national security is plainly not dependent on imports of foreign steel and that enough steel can be produced in the U.S. to satisfy domestic security requirements.

]]> (Sandy Williams) Trade Cases Thu, 25 May 2017 10:21:03 -0400
Existing Home Sales Dip in April

Existing home sales dipped 2.3 percent in April to a seasonally adjusted annual rate of 5.57 million, according to the National Association of Realtors. Sales were 1.6 percent higher than in April 2016.

Existing home inventory increased by 7.2 percent to 1.93 million in April, representing a 4.2 month supply at the current sales pace. Supply of existing homes was 9.0 percent lower than a year ago and has failed to meet year ago levels for 23 consecutive months.

]]> (Sandy Williams) Housing Wed, 24 May 2017 13:48:48 -0400
Kansas City Manufacturers Expecting Future Growth

Manufacturing grew moderately in the Tenth District in May, according to the Federal Reserve Bank of Kansas City. In the bank’s latest survey the composite index rose to 8 from 7 in April. Indicators were mixed, with little change overall from last month. Production and shipment indexes were slightly lower as employment and backlogs inched higher.

New order and new export orders were flat. The finished goods inventory index slid from 8 to zero while raw materials was unchanged at 4. The indices for prices of finished and raw materials eased somewhat.

]]> (Sandy Williams) Federal Reserve District Indexes Wed, 24 May 2017 11:34:27 -0400
SMU MoMo Index Falls Deeper into Negative Territory

The Steel Market Update Steel Price Momentum Index (MoMo) for hot rolled steel in the United States remained negative this week for the fifth consecutive week, following an eight week streak of being in positive territory. 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 Lower indicating that steel prices are expected to remain steady over the next 30 days.

]]> (Brett Linton) SMU Momentum (MoMo) Model Wed, 24 May 2017 10:25:11 -0400
Final Thoughts

During the Section 232 hearing at the Department of Commerce yesterday, Wilbur Ross told U.S. Congresswoman Marcy Kaptur (OH) that his report on steel Section 232 will be on the President's desk by the end of June. This coincides with the prognostication of trade attorney Lewis Leibowitz who felt the President could react by the end of July.

We have placed a number of the speakers testimony in front of the US DOC panel regarding Section 232 on our blog which can be found on our home page: We will continue to post information on our blog as it becomes available.

For those of you who follow Steel Market Update on Twitter @SMUSteel I probably posted 20 tweets as the Section 232 hearing was happening. I try to use our Twitter feed to get the word out quickly on matters of importance to the industry.

]]> (John Packard) Final Thoughts Wed, 24 May 2017 08:00:00 -0400
SMU Price Ranges & Indices: Benchmark HRC Breaks Below $600

"There's been further erosion with EAF's dropping spot to $570-$580, not necessarily tied to volume," is what one large service center told us this afternoon.  "[I am] afraid this market at risk of bigger drops than was anticipated."

Flat rolled price averages were lower across all products followed by Steel Market Update with the exception of plate which managed to hold its average for another week.

We found steel buyers in the Upper Midwest not necessarily seeing the same steel pricing as their counterparts in the South. Mills like ArcelorMittal continue to struggle with deliveries while, as our service center executive admitted above, other steel mills were more sociable at the negotiation table.

]]> (John Packard) Price Indices Tue, 23 May 2017 17:02:27 -0400
Service Centers Report Inventories as Balanced

Flat rolled steel distributors are reporting to Steel Market Update (SMU) that their inventories are balanced to slightly over-stocked and there is minimal need to build carbon sheet inventories from here.

]]> (John Packard) Service Centers/Distributors/Wholesalers Tue, 23 May 2017 16:39:09 -0400
US DOC Selects Speakers for Section 232 Hearing

The U.S. Department of Commerce advised Steel Market Update, as a member of the media, who would be speaking at tomorrow's (Wednesday, May 24, 2017) Section 232 hearing on steel. The hearing is part of the Commerce Department's investigation about the need for steel for national security. Here is what we received from the US DOC:

Public Hearing on Section 232 Investigation of Effect of Steel Imports on U.S. National Security

Secretary of Commerce Wilbur Ross will open public hearing that will examine the effect of steel imports on U.S. national security.

WASHINGTON – The U.S. Department of Commerce will host a public hearing on the Section 232 investigation of the effect of steel imports on U.S. national security on Thursday, May 24, in the U.S. Department of Commerce Auditorium.
Officials from the Department’s Bureau of Industry and Security and International Trade Administration, the U.S. Department of Defense, and the U.S. Geological Survey will also participate in the hearing.

The hearing testimony will assist the Commerce Department in gathering pertinent information regarding the status of the U.S. steel industry from the perspective of domestic and non-U.S. steel manufacturers, importers and others.  The hearing will feature testimony from approximately 35 individuals, representing the U.S. Congress, steel manufacturers, users and importers, foreign embassies and trade associations.

The hearing will start at 10 a.m. and end at approximately 1:45 p.m. The event will be held in the Commerce Department’s auditorium on 14th and Constitution Ave., N.W.   It is recommended that you arrive early to allow time to clear building security and registration.

A live-stream will be available HERE.

Speakers include:

]]> (John Packard) Trade Cases Tue, 23 May 2017 15:34:50 -0400
Weekly Raw Steel Production at 1.74 Million Tons

For the week ending May 20, 2017, the American Iron & Steel Institute (AISI) estimated the U.S. steel industry produced 1,741,000 net tons of raw steel, a 0.8 percent increase over the previous week and a 0.5 percent increase over the revised rate from the same week one year ago. The estimated capacity utilization rate for steel production is 74.7 percent, up from 74.1 percent last week and up from 74.1 percent this time last year.

]]> (Brett Linton) Weekly Raw Steel Production Tue, 23 May 2017 14:49:53 -0400
SMU Steel Summit 2017 – Record Registrations with 97 Days to Go

The 7th SMU Steel Summit Conference is well on its way to smashing attendance records. As of Monday, May 22nd we have close to 320 registrations from 144 individual companies. We are more than 200 registrations above last year’s pace. We hosted 434 attendees at the 2016 SMU Steel Summit Conference. We expect more than 500 attendees at this year’s event which we believe will be one of our best conferences ever.

You can find more information about our conference agenda, costs to attend and how to register on our website: or you can contact our offices at 800-432-3475 - 706-216-2140 - 772-932-7538.

]]> (John Packard) SMU Steel Summit Conference Tue, 23 May 2017 14:04:05 -0400
AISI Re-elects Ferriola as Chairman; Welcomes Essar Steel Algoma as Member

AISI, WASHINGTON, D.C. – The American Iron and Steel Institute’s (AISI) Board of Directors today elected John Ferriola, Chairman, President and CEO, Nucor Corporation, to serve another year as chairman of the Institute, through May 2018.

“John is a recognized leader in the global and domestic steel industry. He is an outspoken advocate for the North American steel industry in the public policy arena, and continues to push for our industry’s interests with legislative and executive branch officials on all levels. John embodies the AISI mission, and continues to be a tremendous representative for the industry and our workers on a global platform,” said Thomas J. Gibson, president and CEO of AISI. “We are grateful to have such an outstanding leader serve for another year as Board Chairman. I am confident that under his continued guidance and leadership, the next twelve months will see many successes.”

]]> (Sandy Williams) Other Indexes/Organizations Tue, 23 May 2017 12:01:39 -0400
May Foreign Steel Imports Trending Toward 3.6 Million Tons

The U.S. Department of Commerce (DOC) reported foreign steel import license data earlier today. May licenses continue at a 3.6 million net ton pace which is quite disturbing (and probably not well timed based on the Section 232 hearing happening on Wednesday). However, almost one-third of the imports are attached directly to the steel mills themselves. The import license trend is for 1 million net tons of semi-finished steels - which are only used by steel producers.

]]> (John Packard) Imports Tue, 23 May 2017 11:12:03 -0400
LME Zinc Bouncing Off May Lows

Zinc prices continue to rise, reaching a two week high of $2,644 per tonne on Monday, May 22 on the London Metal Exchange (LME).

Analysts attribute the increase to China’s regional crackdown on the steel industry as it seeks to bring mills in line with emission standards, as well as mine closures that are creating shortages.

]]> (Sandy Williams) Zinc Tue, 23 May 2017 11:04:53 -0400
New Home Sales Retreat in April

Sales of new single-family homes in April fell 11.4 percent from March to a seasonally adjusted annual rate of 569,000, according to the Commerce Department. Sales were up 0.5 percent from the same month in 2016. The steep slide was unexpected following the ten year high of revised March sales of 642,000.

]]> (Sandy Williams) Housing Tue, 23 May 2017 09:53:08 -0400
Fatality at US Steel Great Lakes Works

A contract worker was killed in a work-related accident at US Steel Great Lakes Works in Ecorse, Mich., early Monday morning. The man, a 32-year-old subcontractor for Mid-American Group Inc., fell about 20 feet to his death in an accident reportedly related to a crane collapse.

]]> (Sandy Williams) U.S. Steel Mon, 22 May 2017 13:24:02 -0400
Richmond Manufacturing Survey Shows Optimism Waning

The Fifth District Survey of Manufacturing Activity showed shipments and new orders fell significantly in May pulling the composite index down to 1 from 20 in April.

The index for backlogs decreased to -15 from 4 in April and vendor lead times increased to an index reading of 6 from 2. The finished goods inventory dropped points to 15 while the raw materials index slipped 7 points to a reading of 17.

]]> (Sandy Williams) Federal Reserve District Indexes Mon, 22 May 2017 10:38:16 -0400
Final Thoughts

I have been working day and night trying to get a list of the invited speakers for the Section 232 (national security) hearing at the U.S. Department of Commerce on the morning of Wednesday, May 24th. The US Department of Commerce came out with the list to the media late this afternoon. The hearings starts at 10 AM ET and you can live stream the hearing by going to:

]]> (John Packard) Final Thoughts Mon, 22 May 2017 08:00:00 -0400
June Ferrous Scrap Pricing Expected to Move Sideways

Steel Market Update has begun to ask our scrap sources to provide some color as to what we can expect. Early indications from our sources are to expect ferrous scrap prices to trade “sideways” (unchanged) from the levels reported at the beginning of May.

One of our sources told us, “The June market looks to be basically sideways despite the in-house broker for Nucor, DJJ, trying to convince dealers that prices are down $10-20 gross ton.  Export sales have risen modestly and dealers struggle each month to fill existing orders due to reduced inflow into their yards. Mills have not indicated if they will issue cancellations of scrap orders at month’s end.  Demand is still good but supply is iffy.”

]]> (John Packard) Scrap Prices Sun, 21 May 2017 15:18:21 -0400
DOC to Hold Public Hearing on Section 232 Investigation on Wednesday

Later this week the U.S. Department of Commerce will hold public hearings for interested parties to voice their opinions regarding the Section 232 (national security) inquiry into the steel industry.

Many believe the conclusion of this investigation was predetermined at the time of the original announcement.

In the Fact Sheet produced by the U.S. Department of Commerce on April 21, 2017 entitled: Frequently Asked Questions: Section 232 Investigations: The Effect of Steel Imports on the National Security the DOC provided clues to the way they are leaning when they asked and answered the following questions:

4. Why has the Secretary of Commerce initiated a Section 232 on steel?

]]> (John Packard) Trade Cases Sun, 21 May 2017 14:03:51 -0400
Essar Steel Algoma Requests Fourth Extension of DIP Financing

Essar Steel Algoma is asking for debtor-in-possession financing to be extended a fourth time until Aug. 30, 2017. In the 31st report of the Monitor, Brian Denega asked that the extension be approved and that a Restructuring Committee be established to take some of the burden of negotiations and restructuring off key executives who can then devote more time to effectively managing Algoma’s business.

Essar Steel Algoma CEO Kaylan Ghosh, Andrew Schultze, Holding Capital Group; and Courtney Pratt, former CEO of Stelco, were selected for the Restructuring Committee, pending court approval.

]]> (Sandy Williams) Essar Steel Algoma Sun, 21 May 2017 12:26:39 -0400
Comparison Price Indices: Another Week of Slipping Price Averages

Flat rolled steel prices continued to slip lower this past week according to the steel indexes followed by Steel Market Update.

Benchmark hot rolled prices slipped $5 per ton on both Platts and our own index. SteelBenchmarker did not report prices as they only produce prices twice per week. The hot rolled average is quickly approaching the key $600 per ton level and Steel Market Update is expecting HRC prices to continue to erode in the coming weeks thus breaking the psychological $600 barrier.

]]> (John Packard) Price Indices Sun, 21 May 2017 11:06:14 -0400
Chinese Ferrous Scrap Slowly Making its Way to Market

Steel Market Update (SMU) first reported that the Chinese were exporting ferrous scrap in an article on April 19, 2017. With the forced shut-downs of induction and electric arc furnaces by the Chinese equivalent of our EPA, the net result is that there is an abundance of ferrous scrap needing a home. Some of that scrap is making its way to Hong Kong, Japan, Korea and the Middle East.

]]> (John Packard) Scrap Prices Sun, 21 May 2017 10:02:05 -0400
AK Steel Receives $1.8 Million Award from Department of Energy

WEST CHESTER, OH--(Marketwired - May 17, 2017) - AK Steel (NYSE: AKS) announced today that it has accepted an award of up to $1.8 million from the U.S. Department of Energy (DOE) under the Advanced Manufacturing Office's Next Generation Electric Machines (NGEM) program to develop the next generation of advanced, non-oriented electrical steels (NOES) for motors used in a wide variety of industrial and automotive applications, including hybrid electric vehicles.

]]> (Sandy Williams) AK Steel Sat, 20 May 2017 14:35:01 -0400
Bits 'N Pieces

Steel Market Update (SMU) had a number of conversations with steel buyers late last week during our trip to Chicago. Benchmark hot rolled prices offers have slipped below $600 per ton with one service center executive discussing a spot offer of $560 per ton coming from one mill (and complaining that they lost of the order by $20 per ton).

]]> (John Packard) Other Steel News Fri, 19 May 2017 13:39:56 -0400
Seats Available for June 22-23 Steel 101 Steel Training Workshop

Throughout my active steel career spanning 31 years  (John Packard, Publisher of SMU) I found my biggest successes were tied to my willingness to expand my knowledge about:

•    Steel and how it can be used,
•    About the process and understanding my customers’ issues and needs and,
•    About what was happening that could/would impact the future of the steel industry.

Steel Market Update has taken these core understandings and incorporated them into our Steel 101 workshop which is suited for those:

•    New to the steel industry
•    Executives coming in from outside the industry
•    Those wanting to understand the industry better
•    Those wanting to expand their knowledge base

We have had people on their first day on the job all the way up to Presidents/CEO’s of companies. Our most recent class had the VP of Commercial for a large steel service center, two attorneys who represent a steel mill, a hedge fund investor, sales and purchasing people from manufacturing as well as distribution, sales and sales support mill people from two flat rolled steel mills each with various degrees of experience and time on the job. Here is what attendees from our Toledo, Ohio class had to say about our workshop (photo is from our Big River Steel class held in 2016):

]]> (John Packard) Steel 101: Introduction to Steelmaking & Market Fundamentals Fri, 19 May 2017 11:59:08 -0400
Final Thoughts

I am working on getting a strong keynote speaker to discuss the impact politics is having on the economy and on our daily lives. I have narrowed the list down to a few names so I thought it might be good to let our readers chime in and tell us who they would like to see and hear at our SMU Steel Summit Conference at the end of August:

]]> (John Packard) Final Thoughts Fri, 19 May 2017 08:00:00 -0400
SMU Steel Buyers Sentiment Index Suffers from Uncertainty

Buyers and sellers of flat rolled steel are slightly less enthusiastic about how they view their company’s ability to be success both in the existing, or current market environment as well as three to six months out into the future. There is an uncertainty that is becoming an issue to business as companies who buy and/or sell steel have to deal with Section 232 investigation, circumvention, Section 337 as well as the 1-year anniversary coming up soon on CORE, cold rolled and hot rolled AD/CVD suits.

]]> (John Packard) SMU Steel Buyers Sentiment Index Thu, 18 May 2017 15:05:56 -0400
Steel Mill Lead Times are Shrinking

Flat rolled lead times have been shrinking over the past eight weeks according to the results of this week's SMU Flat Rolled Steel Market Trends questionnaire. Buyers and sellers of flat rolled steel are reporting shorter lead times than what we measured at the beginning of May and lead times on all products are much shorter than what we saw one year ago.

Shorter lead times are one of the keys when viewing future steel pricing. The shorter the lead time the more pressure on flat rolled steel pricing.

]]> (John Packard) SMU Mill Lead Times Thu, 18 May 2017 14:15:56 -0400
Steel Mill More Willing to Negotiate Flat Rolled Pricing

Since early Monday morning of this week, Steel Market Update (SMU) has been conducting an inquiry into the flat rolled steel markets. We discovered lead times have shrunk which usually relates to lower steel prices and more willingness by the domestic steel mills to negotiate spot prices being offered into the market. SMU inquired on the subject of mill negotiations during our survey of the flat rolled markets and found the mills as being willing to discuss pricing on hot rolled, cold rolled, galvanized and Galvalume steels.

]]> (John Packard) SMU Mill Negotiations Thu, 18 May 2017 13:45:56 -0400
Hot Rolled Futures: No Dip to Buy, But Oil Rebound, MSCI and Ore Holding $60 All Good Signs....

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 Metals website

]]> (Dave Feldstein) Hot Rolled Futures Thu, 18 May 2017 13:19:06 -0400
May License Trend is Indicating a Big Month for Foreign Steel Imports

The U.S. Department of Commerce (DOC) reported foreign steel import license data earlier this week. Based on the daily rate and projecting it over the course of the entire month of May we are anticipating another 3.0 million net ton month. As of the 17th of May the trend is for imports to be close to the 3.4 and 3.5 million net ton levels seen in March and April 2017.

]]> (John Packard) Imports Thu, 18 May 2017 12:21:21 -0400
US Auto Industry Tightens Belt as Sales Dip

U.S. auto manufacturers are tightening their belts as automotive sales fall from their two year highs.  Ford Motor Co. said it will cut 1,400 salaried jobs in North America and Asia through voluntary retirement as shares of stock dropped 2.5 percent on Wednesday.

]]> (Sandy Williams) Automotive Thu, 18 May 2017 12:03:15 -0400
Oil and Gas Prices and Rotary Rig Counts through May 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 Thu, 18 May 2017 11:55:18 -0400
AD/CVD Anniversary Dates

A number of our readers have requested details regarding the CORE (corrosion resistant which is galvanized, Galvalume, etc.), cold rolled and hot rolled trade suit status and when the one-year anniversary for each product are potential reviews are due. Steel Market Update (SMU) went to trade attorney Lewis Leibowitz for answers and he provided the following details:

For antidumping and countervailing duty cases, the key date is the publication of the AD or CVD orders for each product.  Here are dates for the three steel AD/CVD orders (hot-rolled, cold-rolled, corrosion-resistant):

]]> (Lewis Leibowitz) Trade Cases Thu, 18 May 2017 11:11:47 -0400
Lighthizer Announces NAFTA Negotiations

The Trump administration plans to start renegotiation of the North American Free Trade Agreement in mid-August, said US Trade Representative Robert Lighthizer in a letter to Congress today.

Lighthizer said he has triggered the 90-day consultation period with Congress, industries and the public.

]]> (Sandy Williams) World Economy Thu, 18 May 2017 10:25:19 -0400
Empire State Manufacturing Index Now Negative

Manufacturing conditions deteriorated in New York State in May according to the latest Empire State Manufacturing Survey. The general business conditions index slid six points to -1.0. The index is now down 19 points since its February high of 18.7. Economists were expecting the headline index to come in at a positive 7.0 for the month.

New orders and shipments both declined with index readings of -4.4 and 10.6, respectively. The unfilled orders index plummeted 16 points to -3.7; the delivery time index fell nine points to 6.7 indicating a slower pace of increase in delivery times.

]]> (Sandy Williams) Federal Reserve District Indexes Wed, 17 May 2017 15:28:49 -0400
SMU MoMo Index Continues to Indicate Downward Price Direction

The Steel Market Update Steel Price Momentum Index (MoMo) for hot rolled steel in the United States remained negative this week for the fourth consecutive week, following an eight week streak of being in positive territory. 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 Lower indicating that steel prices are expected to remain steady over the next 30 days.

]]> (Brett Linton) SMU Momentum (MoMo) Model Wed, 17 May 2017 11:16:57 -0400
Final Thoughts

This evening I attended the Metals Industry Boy Scout Dinner in Chicago. The steel, and now metals industries have supported the Chicago area Boy Scouts for more than 25 years and, once again, there was close to 1,000 mostly steel people at the cocktail party and dinner. This included steel mills, service centers, trading companies, toll processors and many others who are associated with the industry.

]]> (John Packard) Final Thoughts Wed, 17 May 2017 08:00:00 -0400
SMU Price Ranges & Indices: All Lower Except Galvanized

Earlier today, Steel Market Update (SMU) adjusted our Price Momentum Indicator from Neutral to Lower. Flat rolled prices have been slowly dropping for more than a month and it does not appear there is anything that is going to stop the leak from continuing, at least not over the next 30 days.

Flat rolled steel prices and plate dropped this week on all but galvanized which remained the same as what we reported one week ago.

]]> (John Packard) Price Indices Tue, 16 May 2017 17:00:30 -0400
SMU Price Momentum Indicator Adjusted to Lower

In a move that has been building over the past few weeks, today Steel Market Update (SMU) is moving our Price Momentum Indicator to Lower from Neutral. Our belief at this point is flat rolled steel prices will continue their drift lower over the next 30-60 days as we approach what many in the steel industry call "the summer doldrums."

Flat rolled steel prices have been in a state of decline for a number of weeks as benchmark hot rolled prices peaked at the end of March at $655 per ton and have since dropped $50 per ton.

Galvanized spot base prices have been dropping as well moving off the $865 per ton ($43.30/cwt) peak we reported the week of March 20th to the low $800’s.

]]> (John Packard) SMU Price Momentum Indicator Tue, 16 May 2017 16:22:43 -0400
Service Centers Saw Strong Daily Shipment Rate of Flat Rolled in April

The Metal Service Center Institute (MSCI) released their April 2017 shipment and inventories data for the United States and Canada. The following is a recap of the U.S. data.

Total steel shipments (all products) were reported to be 3,110,500 tons which was 4.2 percent lower than year ago levels (19 days vs. 21 day month last year). The daily shipment rate was 163,700 tons which was the largest daily shipment rate seen since May 2015 (164,000 tons per day).

Shipments for the first four months 2017 are 13,234,900 tons which is 3.3 percent better than 2016 shipment levels.

Inventories were reported to be 6.0 percent below year ago levels with the month of April ending at 7,191,400 tons. The number of months on hand now stands at 2.3 months up from 2.0 months reported at the end of March.

]]> (John Packard) MSCI Tue, 16 May 2017 15:40:18 -0400
Weekly Raw Steel Capacity Utilization Rate at 74.1%

For the week ending May 13, 2017, the American Iron & Steel Institute (AISI) estimated the U.S. steel industry produced 1,728,000 net tons of raw steel, a 0.5 percent decrease over the previous week and a 0.2 percent decrease over the revised rate from the same week one year ago. The estimated capacity utilization rate for steel production is 74.1 percent, down from 74.5 percent last week and the same as it was one year ago.

]]> (Brett Linton) Weekly Raw Steel Production Tue, 16 May 2017 14:50:39 -0400
HARDI Wholesalers Report Ultra Competitive Market

HVAC wholesalers reported despite "good" demand they are seeing ultra-competitive conditions on the sales of galvanized steel they are attempting to sell into the HVAC (heating, ventilation, air-conditioning) markets.

Steel Market Update participates in a monthly steel conference call hosted by HARDI (Heating, Air-conditioning, and Refrigeration Distributors International) for their member companies. The HARDI conference call is dedicated to a better understanding of the galvanized steel market. The participants are wholesalers, service centers and manufacturing companies who either buy or sell galvanized sheet products used by mechanical contractors in residential and commercial construction applications.

This month’s HARDI conference call revealed steel is fairly easy to get at this time. The HARDi members reported short lead times at a number of steel mills that supply galvanized steel. Lead times were reported to be as short as four to five weeks.

One of the wholesalers on the call reported, “Both mills we are working with are pushing for additional tons and willing to give additional reductions for additional tons.” Service centers and mills are both reducing prices, he added.

]]> (Sandy Williams) HARDI Tue, 16 May 2017 13:23:04 -0400
Canadian Service Center Shipments and Inventories in April

Total Canadian steel shipments for all products in April were 362,400 net tons, down 14.0 percent from March and down 2.8 percent from April 2017. On a daily rate, total shipments were 19,100 tons per day in April (19 day month), up from 18,300 tons per day in March (23 day month), and up compared to one year ago when they were 17,800 tons per day (21 day month). Total steel inventories at the end the month were 1,143,100 tons, down 1.9 percent from last month and down 10.0 percent from this time last year.

]]> (Brett Linton) MSCI Tue, 16 May 2017 12:04:45 -0400
Housing Starts and Permits Fall in April

Housing starts surprised economists by moving lower in April to a seasonally adjusted annual rate of 1,172,000. April’s tally is 2.6 percent below the March estimate of 1,203,000 but 0.7 percent higher than a year ago. Projections were for starts to reach 1.26 million in April.

Starts increased 41.1 percent in the Midwest and 5.4 percent in the West. Starts in the Northeast and South declined 37.3 percent and 9.1 percent, respectively.

]]> (Sandy Williams) Housing Tue, 16 May 2017 11:26:46 -0400
AM Castle Announces Q1 Results and Restructuring Update

AM Castle, a distributor of specialty metal and supply chain solutions, reported net sales in Q1 2017 of $136 million, a decrease of $28 million or 17 percent compared to Q1 2016 net sales of $164 million, which included the $27 million sale of inventory of the Houston and Edmonton locations.

Tons sold per day increased 5.7 percent compared to the same period last year. And excluding the tons sold from the Houston and Edmonton locations in the first quarter 2016, tons sold per day increased 10.6 percent, offsetting the positive impact of the increase in volumes as a 5.1 percent decrease in average selling prices as well as an unfavourable change in product mix.

]]> (Sandy Williams) Service Centers/Distributors/Wholesalers Tue, 16 May 2017 10:02:07 -0400
World Trade Outlook Indicator Suggests Moderate Trade Expansion in Q2

The World Trade Organization expects global trade to continue to expand moderately in second quarter 2017. The World Trade Outlook Indicator (WTOI) rose to 102.2 and was the highest reading since May 2011.

Export orders, container shipping, and air freight recorded strong gains in recent months, signaling above-trend growth in merchandise trade volumes for the second quarter, according to WTO. Demand weakened for automotive products, electronics and agriculture raw materials.

]]> (Sandy Williams) Other Indexes/Organizations Tue, 16 May 2017 09:08:09 -0400
March 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 March 2017. You may read the press release on their website here.

]]> (Brett Linton) Appliances Mon, 15 May 2017 16:02:07 -0400
Final Thoughts

I have read reports that suggest the first fully integrated mill in Vietnam, Formosa Ha Tinh Steel, has received permission to test their #1 blast furnace. The Vietnamese government has approved the pollution control equipment and the company is going to be allowed to run the blast furnace on a six-month trial period. In July 2016, this same mill caused a devastating toxic spill that impacted 125 miles of coastline in the province of Ha Tinh and three other provinces in Central Vietnam, affecting the country's fishing and tourism industries.

]]> (John Packard) Final Thoughts Mon, 15 May 2017 08:00:00 -0400
How Much Power Does Section 232 Give the President to Restrict Steel Imports?

How Much Power Does Section 232 Give the President to Restrict Steel Imports?

Commentary by Lewis Leibowitz
The Law Office of Lewis E. Leibowitz
Washington, D.C.

We have had many questions about the power of the President under Section 232 of the Trade Expansion Act of 1962.  The statute gives the President considerable power to take action to prevent imports from impairing the national  security.  This power has not been used very often.  Since 1980, the Commerce Department has conducted 14 investigations under Section 232. Very few were successful in obtaining import relief.

1.    Procedure

Section 232 is invoked either by self initiation by the President, or upon a petition by a U.S. industry claiming that imports of any article threaten to impair the national security.  The current investigations on steel and aluminum were self-initiated based on orders of President Trump.

The statute requires the Department of Commerce to conduct an investigation and prepare a report for the President within 270 days of the initiation of the investigation.  Commerce published the notice of initiation April 26, but the investigation was said to have been initiated on April 19, 2017. The deadline for the completion of Commerce’s investigation and report to the President would therefore by 270 days after April 19, or January 14, 2018. 

]]> (Lewis Leibowitz) Trade Cases Sun, 14 May 2017 22:31:19 -0400
Construction Still Has Legs

Construction has expanded in the U.S. for over 30 quarters, and it still has legs, said Alex Carrick, Chief Economist at ConstructConnect.

ConstructConnect presented a webinar May 11, entitled “Bump or Slump? 2017 Prospects for Design & Construction. AIA chief economist Kermit Baker and AGC of America Chief Economist Ken Simonson joined Carrick in discussing the construction industry.

Why does Carrick think the industry still has legs? First of all, in the past ten years residential construction has been short of the historical annual average of 1.5 million units per year. The accumulative total shortfall during that period is about 6 million units, said Carrick, about 4 years worth of normal construction.  When residential gets back on track it will become an “engine of growth,” he said. In addition, Millennials are expected to begin starting families and move out from urban areas to the suburbs which should spur residential construction as well.

]]> (Sandy Williams) Construction Sun, 14 May 2017 15:39:23 -0400
Will Steel Mills “Push the Pricing Envelope” if Provided the Opportunity?

Steel Market Update (SMU) has an active presence on social media. We find LinkedIn in particular an area where we can get our LinkedIn readers involved in a subject prompting questions and responses.

In the preamble prior to the posting of an article produced by Steel Market Update entitled “Is Trump Administration the Next Black Swan Event for Steel Industry” SMU publisher, John Packard said, “The Trump Administration through the US Department of Commerce is making bold moves that could impact the amount of foreign steel coming into the country. This could restrict supply forcing prices even higher and perhaps pushing manufacturing out of the United States….”

This prompted a flurry of responses (the authors of the responses can be found in the LinkedIn group called Steel Market Update).

]]> (John Packard) Steel Mills Sun, 14 May 2017 15:31:30 -0400
Steel Makes a Comeback in Audi A8

The following article was provided and first published by ArcelorMittal USA news:

After experimenting with aluminum in its luxury models, Audi’s next A8 will switch back to steel. Scheduled for release in 2018, the body structure of the new A8 will be made up of more than 40 percent steel, following the trend of automakers opting to use advanced high-strength steels in new vehicles. That’s a marked turnaround from the all-aluminum body-in-white which Audi developed for the A8 in 1994.

Since, steel has evolved dramatically. In fact, steel’s strength has multiplied by almost 10 times over the past 20 years, from 270 to 2000MPa tensile strength. More than 80 new steel products are under development at ArcelorMittal, with an automotive steel grade portfolio of almost 200 unique steel grades, half of which were introduced in just the past decade.

]]> (Sandy Williams) ArcelorMittal Sun, 14 May 2017 10:19:02 -0400
ArcelorMittal Profits Surge in Q1

ArcelorMittal NAFTA turned in solid results for first quarter 2017. The segment, composed of Indiana Harbor, AM/NS Calvert and ArcelorMittal Dofasco, had sales of $4.46 billion, up from $3.7 billion in Q4 2016 and $3.82 billion in Q1 2016.

Operating income increased to $396 million from $164 million the previous quarter and $339 million the previous year. Improved results were due mostly to improved average selling price and a 12 percent increase in shipments to 5.6 million tons.

]]> (Sandy Williams) ArcelorMittal Sat, 13 May 2017 10:07:03 -0400
Comparison Price Indices Had Mixed Week

Hot rolled prices have been dropping over the past few weeks and that trend continued with all three steel indexes followed by Steel Market Update reporting lower hot rolled coil price averages last week.

Steel Market Update's (SMU) own index saw HRC prices as being down $15 per ton ($0.75/cwt) to $610 per ton ($30.50/cwt). Platts took their numbers down $10 per ton to $615 per ton and SteelBenchmarker, which only produces their index twice per month, dropped $16 per ton to $623 per ton.

]]> (John Packard) Price Indices Sat, 13 May 2017 08:18:07 -0400
Steel 101: Introduction to Steel Making & Market Fundamentals Workshop – June 22 & 23

There are now 38 days remaining before the start of our Ontario, California Steel 101 workshop. We still have plenty of seats available for this workshop that features a tour of the California Steel Industries (CSI) steel mill.

Our instructors have a combined 165+ years of experience in the steel mill, service center, trading company, toll processing and manufacturing segments of the industry.

Steel 101 focuses in on the steelmaking and rolling process in a way that is valuable to those who are early in their steel careers without “dumbing down” the process for those with more years under their belts. We have had everyone from “newbies” to company CEO’s participate in and enjoy our unique steel training workshop.

“Overall, a job well done explaining steelmaking and the market fundamentals to a varied audience. Whether you're eight weeks or eight years in the steel business, there's something in it for you.” says Kari LaHaie, Magic Steel who attended our Huntsville, Alabama workshop.

Being able to take a workshop straight from the classroom to a working steel mill to actually see what we have been teaching is a powerful tool in reinforcing the learning process.

]]> (John Packard) Steel 101: Introduction to Steelmaking & Market Fundamentals Fri, 12 May 2017 19:33:30 -0400
US Rig Count Up 8 Last Week

According to Baker Hughes data from May 12, 2017, the US rig count for the week was 885 rigs exploring for or developing oil or natural gas. This is up 8 rigs compared to last week, with oil rigs up 9 to 712 rigs, gas rigs down 1 to 172 rigs, and miscellaneous rigs unchanged at 1 rig. Active US rigs have increased week over week for the past 17 weeks (see the first chart below). Compared to this time last year, the 885 count is up 479 rigs, with oil rigs up 394, gas rigs up 85, and miscellaneous rigs unchanged.

]]> (Brett Linton) Energy Fri, 12 May 2017 13:56:45 -0400
Final Thoughts

Happy Mother's Day (at least for one more hour here on the East Coast)...

We are beginning our mid-May flat rolled steel market trends survey at 8 AM ET tomorrow (Monday) morning. If you receive an invitation to participate please take a few minutes to click on the button on your invitation and complete our questionnaire. At the end of this week we will have a Power Point presentation which is available to those who participate in the survey as well as our Premium level customers.

]]> (John Packard) Final Thoughts Fri, 12 May 2017 08:00:00 -0400
Tim Triplett to Join Steel Market Update

Steel Market Update is pleased to announce that Timothy (Tim) Triplett, long-time editor of Metal Center News Magazine, will join the Steel Market Update staff as Executive Editor in early June 2017.

]]> (John Packard) Steel Market Update Thu, 11 May 2017 17:39:47 -0400
Trading Companies Concerned About Possible Section 232 Impact

Steel Market Update (SMU) spoke with many trading companies over the past few days about concerns their companies might have with the status of the industry and efforts to stop foreign steel from entering the country. “The trading companies are not the bad guy here,” is what one trading executive said to us late this afternoon. The U.S. economy has needed foreign steel in the past as the domestic steel mills cannot produce all of the steel that is needed when we have a full economy. There are items that the domestic mills do not want to produce (such as ultra-light gauge galvanized) or cannot yet produce in significant quantities to handle the needs of the U.S. manufacturers. Of course, one of the reasons foreign steel exists in the U.S. is due to price and, in some cases, it is used as leverage to keep domestic steel prices from spiking, thus making U.S. manufacturers non-competitive in what is a world economy.

]]> (John Packard) Trading Companies Thu, 11 May 2017 16:12:03 -0400
Mario Longhi Steps Down as CEO of US Steel

US Steel announced on Wednesday that Mario Longhi has stepped down as CEO of US Steel Corp. As of May 8, 2017, president and chief operating officer David Burritt will take the reins as chief executive officer.

Longhi will remain on the board of directors and as an employee of US Steel, providing transitional support, until his retirement on June 30, 2017.

]]> (Sandy Williams) U.S. Steel Thu, 11 May 2017 15:27:58 -0400
Mario Longhi Concludes a 5-Year Tenure at US Steel

The retirement of Mario Longhi from US Steel follows the company’s devastating first quarter loss of $180 million. Despite efforts to rein in costs at US Steel through the much touted Carnegie Way, US Steel managed only one profitable year, 2014, under Longhi’s tenure. The Q1 2017 results caused a 27 percent crash of US Steel’s stock in just one day.

Despite the poor results, the retirement announcement caught many in the industry by surprise. The company had just announced a multi-year $1 billion-plus revitalization program to bring its facilities back up to operational efficiency. Longhi and US Steel had also caught the favor of the Trump Administration which has renewed efforts to protect America’s steel industry.

]]> (Sandy Williams) U.S. Steel Thu, 11 May 2017 14:31:26 -0400
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 import prices (delivered to USA ports) and domestic (USA) hot rolled coil prices (FOB Domestic mills). We want our readers to be aware that this is only a "theoretical" calculation as freight costs, trader margin and other costs can fluctuate ultimately influencing the true market spread.

Our primary numbers for this exercise are from Platts as we compare 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... SteelBenchmarker is the secondary data provider of foreign hot rolled coil prices and is noted further down in this article.

]]> (Brett Linton) International Steel Prices Thu, 11 May 2017 13:03:31 -0400
Hot Rolled Futures: Buying the Dips

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:


We have seen some evidence late this week of participants "buying the dips" in what has been a rather thin and choppy HR futures market.  The HR market looked quite soft earlier this week, but lack of a clear sell signal on Wednesday seems to have given some folks the signal driver to buy the dip.  Most of the spot indexes have given the markets a divergent signal for the second week in a row. It appears the mills seem to have shown greater pricing discipline supported by longer lead times and stubbornly tight scrap supplies.

]]> (Jack Marshall) Hot Rolled Futures Thu, 11 May 2017 11:58:24 -0400
Robert Lighthizer Confirmed as US Trade Representative

Robert Lighthizer was confirmed as the new US Trade Representative by an 82-14 vote in the Senate on Thursday.

Lighthizer faced some opposition from Republican Senators John McCain (Ariz.) and Ben Sasse (Neb.) who said they would vote against the Trump nominee because of his views concerning NAFTA and his alliance with the Administration’s protectionist policies.

]]> (Sandy Williams) Trade Cases Thu, 11 May 2017 10:41:09 -0400
Nucor Promotes Leon Topalian to Executive Vice President

Nucor Corporation announced today the promotion of Leon Topalian to Executive Vice President, effective May 14, 2017. Topalian is currently Vice President and General Manager of Nucor-Yamato Steel Company.

John Ferriola, Nucor's Chairman, CEO and President, commented, "Leon has served Nucor in many key roles, and now he will be a strong addition to our executive leadership team. His promotion to Executive Vice President is the result of thoughtful and orderly succession planning that has been a significant strategic initiative throughout the Nucor organization in recent years."

]]> (Sandy Williams) Nucor Thu, 11 May 2017 09:28:49 -0400
SMU Steel Summit Conference – Status of Hotel Rooms for the Conference

The lead hotel for the SMU Steel Summit Conference, Atlanta Airport Marriott Gateway Hotel, has sold all of the rooms associated with our room block. The hotel does have a limited number of higher-priced rooms ($239/night or higher). Steel Market Update anticipated the Marriott selling out and we have a limited number of rooms blocked at the SpringHill Suites Atlanta Airport Gateway; you may book your stay via this link or by calling 770-907-8880.

]]> (John Packard) SMU Steel Summit Conference Wed, 10 May 2017 15:20:14 -0400
China Minister Comments on US and EU Trade Cases

China’s Ministry of Commerce called the initiation by the U.S. of antidumping investigations on imports of cold-drawn steel mechanical tubing from China and five other countries “excessive,” in comments made on Thursday.

Wang Hejun, head of the trade remedy and investigation bureau, said he was concerned over rising protectionism from the United States.

]]> (Sandy Williams) Trade Cases Wed, 10 May 2017 13:34:59 -0400
SMU MoMo Index: Third Week Indicating Negative Price Direction

The Steel Market Update Steel Price Momentum Index (MoMo) for hot rolled steel in the United States remained negative this week for the third consecutive week, following an eight week streak of being in positive territory. 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 Neutral indicating that steel prices are expected to remain steady over the next 30 days.

]]> (Brett Linton) SMU Momentum (MoMo) Model Wed, 10 May 2017 10:40:35 -0400
Final Thoughts

As I mentioned in one of the articles in tonight's edition of SMU, I have been speaking with trade attorney Lewis Leibowitz on a whole host of subjects. We will be working on an article to help our readers better understand the ramifications of the Section 232 review (national security) and what powers the President of the United States has to respond to the Department of Commerce findings. The steel and manufacturing industries could be in for a shock, or, maybe nothing will happen at all.

I have also been asked when the annual reviews are due for CORE, cold rolled and hot rolled antidumping and countervailing duties. I am going to check with Lewis Leibowitz on this subject as well. My gut feel is that we will be seeing some of the reviews at about the time of our conference (in case you needed another reason to attend).

]]> (John Packard) Final Thoughts Wed, 10 May 2017 08:00:00 -0400
SMU Price Ranges & Indices: Mixed Results

We saw mixed results this week with two products moving lower (hot rolled and galvanized), two remained the same (cold rolled and Galvalume), and plate prices rose a modest $5 per ton.

]]> (John Packard) Price Indices Tue, 09 May 2017 16:42:18 -0400
This Steel Market is All About Accessing Risk (and there is a lot of it)

Lately, Steel Market Update (SMU) has been hearing the word “risk” bantered about by many within the steel industry. In Steel Market Update’s opinion, how one perceives the risks associated with buy and sell decisions is one of the factors determining the direction of flat rolled steel prices. which at this time are moving lower.

The concern (risk) is how much longer will prices slip and what issues that buyers and sellers can't control are creating doubts?

A good example is the Section 232 investigation called for by the Trump Administration. A Section 232 investigation is supposed to determine how critical domestic steel is to the national security of the United States. The Department of Commerce is expected to finish the investigation sometime between now and the maximum allowable time which is 270 days. Comments have been attributed to Secretary Wilbur Ross that the investigation will be finished sooner rather than later because of the deep cache of antidumping and countervailing duty trade cases filed by the steel industry over the past few years.

There are those who are concerned about the Section 232 investigation. “There is a dark cloud hanging over this market,” is what one service center buyer said to SMU earlier today,“and it will continue until we hear about these trade cases.”

]]> (John Packard) Steel Prices (North America) Tue, 09 May 2017 16:03:58 -0400
SMU Steel Summit Conference 2017 on Pace to Shatter Attendance Records

The number of people registered to attend the 7th SMU Steel Summit Conference is approaching 300 people from more than 120 companies. We have 200 more registrations now than we had one year ago for our 6th SMU Steel Summit Conference. We are well on our way to shattering last year’s attendance record of 430 attendees and we continue to believe our 2017 Conference will reach/exceed the 500-executives level.

Over the past few days we have seen new registrations from CSN*, CAN-PACK* (Poland), Cooper Consolidated, Hercules Industries, Illinois Tool Works*, Olympic Steel, Tempel, AK Steel*, Hartree Partners and LEEDY Manufacturing Co* (companies with an * mean there are more than one attendee from that company).

We are aware of a few large companies who are extending their stay to conduct sales or executive meetings either at the hotel, conference center, or close by. With the facility being located adjacent to the Atlanta International Airport (ATL) it is an excellent time and spot to conduct company business and attend the fastest growing steel conference in North America!

For more information about the conference please go to our website: or contact our offices: 800-432-3475/772-932-7538 or You can register online or through our offices.

]]> (John Packard) SMU Steel Summit Conference Tue, 09 May 2017 15:35:33 -0400
Service Center Spot Prices Weakening

Last week Steel Market Update completed our early May flat rolled steel market trends analysis. During the process, we asked manufacturing companies and service centers to comment on the status of the service center spot market pricing. We found agreement within both camps that steel distributors have been transitioning from a market where they were asking for higher prices to a more balanced spot price environment.

Manufacturers reported only 19 percent of flat rolled distributors were lowering prices, 10 percent raising prices and the vast majority (71 percent) were keeping prices stable (see graphic below).

]]> (John Packard) Steel Prices (North America) Tue, 09 May 2017 15:21:20 -0400
Flatbed Truck Availability Tightens as Demand Increases

Flatbed trucks are generally first choice to move steel products from mills to distribution centers to manufacturing clients. What determines what freights will be for this workhorse of the steel industry?

Freight costs are influenced by fuel costs, weather, seasonal demand, historical costs, and load-to-truck ratios. Flatbed rates are particularly vulnerable to weather conditions in the Midwest and Northern states. During winter months, flatbed capacity shifts to the South, pushing rates up in the colder regions as fewer trucks become available and weather conditions make driving more hazardous. During summer weather, capacity generally eases in the region but can still be volatile due to other factors.

]]> (Sandy Williams) Truck Tue, 09 May 2017 13:51:59 -0400
Weekly Raw Steel Production at 1.737 Million Tons

For the week ending May 6, 2017, the American Iron & Steel Institute (AISI) estimated the U.S. steel industry produced 1,737,000 net tons of raw steel, a 0.7 percent decrease over the previous week but a 0.3 percent increase over the revised rate from the same week one year ago. The estimated capacity utilization rate for steel production is 74.5 percent, down from 75.1 percent last week but up from 74.1 percent this time last year.

]]> (Brett Linton) Weekly Raw Steel Production Tue, 09 May 2017 12:29:54 -0400
Net Job Creation by Industry through April 2017

The US Gross Domestic Product is the values of goods and services produced by all economic activity. The growth of GDP is a function of the growth in the number of employed people multiplied by the growth of their productivity. Steel consumption is correlated to GDP, therefore to understand the direction of the steel market it is useful to know more about the growth in employment. The Bureau of Labor Statistics (BLS) monthly report of net job creation presents the big picture and also enables us to drill down into sub sectors such as manufacturing and construction. This is therefore valuable in understanding the drivers of our particular steel business.

]]> (Peter Wright) Economy Tue, 09 May 2017 11:19:48 -0400
Roger Newport Named Steelmaker of the Year at AISTech 2017

AIST - NASHVILLE, 9 May 2017 — Roger K. Newport, chief executive officer and board member, AK Steel, was named Steelmaker of the Year at AISTech 2017 — The Iron & Steel Technology Conference and Exposition, managed by The Association for Iron & Steel Technology (AIST). The Steelmaker of the Year Award is presented annually by AIST to recognize notable leaders and their contributions to the steel industry.

]]> (Sandy Williams) Other Steel News Tue, 09 May 2017 10:29:58 -0400
Stelco Nears End of Restructuring

Stelco, the former US Steel Canada, is getting nearer to emerging from CCAA protection. A “sanction hearing” is scheduled for June 9 during which the court will decide whether Bedrock Industries will be the new owner.

Bedrock has the support of most of the stakeholders but is still facing resistance from the local unions who say there are still details to work out before a collective agreement can be ratified. Justice Wilton-Siegal wants the contracts to be ratified before he will agree to finalize the sale.

]]> (Sandy Williams) Stelco Tue, 09 May 2017 10:28:34 -0400
Final Thoughts

My “final thoughts” is an area of the newsletter where I can provide some of my opinions on a wide range of topics, provide information or updates on our workshops and conference or provide late-breaking tidbits from around the world that come in late in the day and are unable to make it into a full article.

I was asked earlier today if I thought the Section 232 investigation will end up affecting the steel industry. I don’t have an answer to that question. Trade attorney Lewis Leibowitz has shared the results of the last time a Section 232 was used for the industry (Right after 9/11 there was an iron ore/semi-finished review). At that time, the industry was not deemed critical for national security. However, my gut tells me the Trump Administration is using a much broader definition of what constitutes national security including damage to manufacturing or other companies whose employment is considered critical to the health of the country.

]]> (John Packard) Final Thoughts Mon, 08 May 2017 08:00:00 -0400
Service Center Inventories: Balanced, Too High, Too Low?

Steel Market Update (SMU) has been struggling to make sense of the most recent carbon flat rolled inventory numbers for service centers. What we learned from the MSCI did not match the conversations we were having with service center steel buyers across the country. SMU has been working on ways to provide a separate and independent review of distributor inventories. One of the ways is through our twice monthly flat rolled steel market trends analysis. We have added questions focused on inventories and, perhaps more importantly, how service centers are reacting to their current inventory situation either by becoming more active or less active buyer of flat rolled steels.

]]> (John Packard) Service Centers/Distributors/Wholesalers Sun, 07 May 2017 17:07:41 -0400
USITC Issues Final Injury Determination on CTL Plate

The U.S. International Trade Commission made a final determination that the U.S. steel industry has been materially injured by imports of carbon and alloy steel cut-to-length plate from Austria, Belgium, France, Germany, Italy, Japan, Korea, and Taiwan. Antidumping (AD) orders will be issued on imports of these products from the eight countries as well as countervailing duties (CVD) on imports of the products from Korea.

No critical circumstances were found by the Commission on imports of CTL plate from Austria, Belgium or Italy.

The product in the investigation is cut-to-length (CTL) plate, a flat-rolled or press-forged carbon or alloy steel product that is 4.75 millimeters or more in thickness.

]]> (Sandy Williams) Trade Cases Sun, 07 May 2017 15:21:06 -0400
US Steel Exports Highest Since November 2014

March 2017 steel exports totaled 948,606 net tons (860,562 metric tons), up 14.6 percent over February and up 22.4 percent from March 2016. This is the highest export level seen since November 2014 when 953,828 tons of steel were exported out of the US. The total March export figure is above the three month moving average (average of January 2017, February 2017, and March 2017) and above the twelve month moving average (average of April 2016 through March 2017). Here is a breakdown flat rolled and plate exports:

]]> (Brett Linton) Exports Sun, 07 May 2017 13:42:31 -0400
SMU Steel Summit 2017: Full Conference Program

The 2017 edition of our SMU Steel Summit Conference is coming into focus and we are pleased with the quality of our speakers and the value associated with our program. Attending a SMU steel conference is informative, educational and entertaining. We strive to produce a high-quality program with speakers who know their subject matter and are excellent communicators. Of course, a SMU event is the place to be seen, to network and to develop new business relationships. Our conference attracts decision-makers from manufacturing, distribution, steel mills, trading companies as well as toll processors and companies associated with the industry.

]]> (Brett Linton) SMU Steel Summit Conference Sun, 07 May 2017 11:57:35 -0400
March Apparent Steel Up 6.7% Over February, Up 9.4% Over Last Year

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 March 2017 was 9,300,718 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 Sun, 07 May 2017 10:12:15 -0400
Comparison Price Indices: Spread Between Indexes Shrinks

Last week we saw adjustments to the indices that brought the Steel Market Update and Platts numbers closer to one another.

Hot rolled is now averaging $625 per ton ($31.25/cwt) on both SMU and Platts (SteelBenchmarker did not provide numbers last week as they only publish their indices twice per month).

]]> (John Packard) Price Indices Sat, 06 May 2017 14:19:06 -0400
Logistics Report May 2017

A look by Steel Market Update at shipping conditions…

Seaborne Freight

Rates have eased in all four of the major shipping segments (cape, panama, Supramax and handy) in second quarter, according to April’s MID-SHIP Report. Rates are expected to continue to ease throughout this month creating a potential early summer slump. Coal and steel raw material shipments appear to be weaker than expected. MID-SHIP expects continued volatility but a general market recovery, noting that long term activity remains strong.

]]> (Sandy Williams) Shipping and Logistics Sat, 06 May 2017 11:51:59 -0400
Dodge Momentum Index Dips in April (Upward Momentum Trend Continues)

The Dodge Momentum Index slipped 5.1 percentage points in April to a reading of 133.8. Institutional planning fell 12 percent while commercial construction planning gained only 0.1 percent.

]]> (Sandy Williams) Construction Fri, 05 May 2017 16:37:00 -0400
US Rig Count Continues to Grow

According to Baker Hughes data from May 5, 2017, the US rig count for the week was 877 rigs exploring for or developing oil or natural gas. This is up 7 rigs compared to last week, with oil rigs up 6 to 703 rigs, gas rigs up 2 to 173 rigs, and miscellaneous rigs down 1 to 1 rig. Active US rigs have increased week over week for the past 16 weeks. Compared to this time last year, the 877 count is up 462 rigs, with oil rigs up 375, gas rigs up 87, and miscellaneous rigs unchanged.

]]> (Brett Linton) Energy Fri, 05 May 2017 13:11:29 -0400
Final Thoughts

This week I will be working with as many trading companies as I can find to talk about what is going on with foreign steel orders and their reaction to the uncertainty being painted with the Section 232 investigation. I have heard of orders being cancelled. I have heard of countries no longer being in the market. I have heard of trading companies contemplating adding an "out" should the government make a move that impacts their orders.

]]> (John Packard) Final Thoughts Fri, 05 May 2017 08:00:00 -0400
SMU Steel Buyers Sentiment Index 3MMA +73.50

Twice per month, Steel Market Update (SMU) conducts a review of how buyers and sellers of flat rolled steel feel about their company’s ability to be successful in the existing market (Current Sentiment) as well as three to six months out (Future Sentiment). Earlier today we crunched the data and found the flat rolled steel industry is still very optimistic about the industry as the data continues to be very close to record highs.

Looking at the existing market from a single data point perspective, our Current Sentiment Index is +73, up one point from the middle of April but down 4 points from the all-time high of +77 recorded during the first week of March 2017.

]]> (John Packard) SMU Steel Buyers Sentiment Index Thu, 04 May 2017 18:09:17 -0400
Ferrous Scrap Pricing for May “Strong Sideways” to Slightly Higher

It is the first week of May and the negotiations between the long and flat rolled steel mills have been in full swing all week. By late today (Thursday) word of how the scrap dealers had fared has been coming into our offices. The first region to settle was Detroit which was up $10 on prime grades with busheling coming in at $360 per gross ton delivered. The other items remained unchanged with shredded scrap at $300 per gross ton and #1 HMS at $275 per ton.

With the domestic steel mills not canceling their April open scrap orders that had not been delivered by the last day of the month, we had an early indication that the mills were expecting sideways to slightly higher numbers.

This evening we heard from one of our scrap dealers on the east coast who told us solid demand at the mills and limited export tonnage coming off the docks here in the U.S. helped keep the market strong. “I would call the May market strong sideways in general with mills in the Ohio Valley and Pennsylvania raising prices for shred and cut grades $5-$10/GT over April levels.  Mills in other regions were able to keep prices at April levels.  Prime scrap generally traded sideways too, though we saw pockets of strength and higher prices in the east to catch up with other areas of the country.  There is still some concern amongst the mills about prime scrap supply despite the exception of import cargos due to enter the US during May and June and rumors that by July pig iron should retreat.”

]]> (John Packard) Scrap Prices Thu, 04 May 2017 17:31:00 -0400
How Soon Before Chinese Scrap Makes its Way to USA?

Ferrous scrap prices settled in Detroit with prime grades (bundles/busheling) settling at $360 per gross ton. At the same time there is Chinese auto bundles for sale at very low prices FOB China. Chinese scrap exports are new for the Chinese and there are issues that need to be overcome before they become major suppliers of the product onto the world stage (including the United States).

]]> (John Packard) Scrap Prices Thu, 04 May 2017 17:14:20 -0400