Production has been suspended at the Nucor Louisiana DRI plant due to an major failure of the process gas heater on November 2. The company is assessing the damage from the incident but is not yet able to estimate how long repairs will take. The incident caused no injuries or environmental impact and no damage […]
I have been in New York City since Sunday. I am participating in a panel on Wednesday at the Cowen & Company conference. Steel people don’t get to attend most of the financial related conferences. The attendees tend to be hedge fund managers and investors. Their perspectives of the steel industry can be quite different […]
One thing that we learned from the earnings conference calls which were conducted over the past two weeks: the domestic steel mills will be entering 2015 with all of their blast furnaces online, maintenance completed and (hopefully) running well. Barring any unforeseen circumstances we should have plenty of domestic supply going into the traditionally strong […]
Steel Market Update (SMU) conducted our early November flat rolled steel market survey this week. We invited approximately 600 companies to participate in the process. Of those participating 44 percent were manufacturing companies and 44 percent were steel service centers. The balance of the respondents was comprised of 6 percent trading companies, 5 percent steel […]
The World Steel Association published its 2014 statistical year book this week with data through 2013. Figure 1 shows total crude steel production in the U.S. since 1880 in short tons. The peak production was 150,483,000 tons in 1973. The final total for 2013 was 95,566,000 tons, down by 2.05 percent from 97,565,000 in 2012. […]
Over the past few days, Steel Market Update has received a number of inquiries from steel buyers who were upset that they are being put into a position where they have to consider buying foreign steel rather than domestic due to the pricing disparity between the two products. A Midwest service center buyer reported that […]
Nucor followed up their verbal price increase of $20 per ton last week with specific base prices yesterday (Wednesday, November 5, 2014). In a letter from the Nucor Sheet Mill Group, the mill advised their customers that their minimum base price levels on spot flat rolled are now: $33.00/cwt ($660 per ton) and $39.00/cwt ($780 […]
AK Steel, US Steel, Nucor (verbal) and ArcelorMittal all made spot price adjustments this past week. A number of the smaller mills are holding back or have lead times out into 2015 and their order books are closed. Steel Market Update Price Momentum Indicator continues to point toward Neutral meaning prices could be in transition […]
China has a number of taxes on steel, both domestically and for exports. This is one of the misunderstandings many countries have (including the United States). We have been speaking about the subject with one of our key Asian trading contacts over the past few days as we asked about possible suspension of Boron added […]
We didn’t get the transcript of the AK Steel earnings conference call until this evening. A little late to do a full blown article. However, there were a few items that I wanted to point out to our readers. AK Steel reported that approximately 50 percent of their business is related to automotive. They reported […]
For the majority of the month of October, the SMU Steel Price Momentum Indicator was referencing lower prices for the next 30 to 60 day period. At the end of the month, we revised our Indicator to Neutral due to AK Steel, US Steel and Nucor having made $20 per ton price increase announcements. It […]
Nucor Corp. is reportedly one of the steel mill in talks with Cliffs Natural Resources over an investment plan for the Bloom Lake iron ore mine in Canada. Cliffs CEO Lourenco Goncalves said in the company earning calls that Cliffs would seek three investors, to partner at 10 percent each, to develop Phase 2 of […]
So, the question of the week is – will the $20 per ton price increase announced by most of the mills, first, be followed by those who have not yet announced, and second, will the mills even attempt to make it stick. A $20 per ton increase does not represent strong, confident steel producers. Usually […]
Commercial Metals Company (CMC) reported net earnings of $34.9 million for its fourth quarter ending August 31, 2014. Net sales increased 12 percent year over year to $1.9 billion. For the full fiscal year 2014, net earnings were 115.6 million on net sales of 7 billion. In comparison, FY 2013 net earnings were 77.3 million […]
Cliffs Natural Resources is a leading producer and supplier of iron ore pellets to the Great Lakes regions. CEO Lourenco Goncalves spoke at length about the iron ore market during the Cliffs earnings conference call this week. “Our U.S. Iron Ore pellets are often incorrectly compared with seaborne iron ore fines. Fines require additional processing […]
I adjusted the SMU Price Momentum Indicator from Lower to Neutral in recognition of the attempt by the domestic steel mills to reverse the price trend and move prices higher. A Neutral indicator means prices could move in either direction (or remain stable) over the next 30 days. I understand two mills have made very […]
This is good. There is a debate going on within the industry regarding the need for a price increase and whether the customers (tail) are wagging the dog (mill). One buyers ask SMU, “Knowing their history of lacking price discipline…taking advantage of their fear and uncertainty of not filling mill and talking the market down […]
Reliance Steel & Aluminum Co reported record sales for third quarter of $2.71 billion on shipments of 1.5 million tons. Not only did the company have good results to report, the Reliance executives had good commentary to offer in their third quarter conference call. Reliance noted that their purchase of imported steel has increased from […]
On Thursday of this past week Nucor announced their earnings and conducted their quarterly earnings conference call with analysts. SMU has highlighted a number of subjects touched on during the conference call. The following information (minus the headers) was taken directly from The Street transcript of the call: Potential for Light Flat Rolled Trade Cases […]
Steel Market Update is beginning to see weakness in demand based on the results of our last two flat rolled steel market surveys. The manufacturing companies are the first to report the weakness and service centers are beginning to follow. Our Premium (and free trial) level members can review the Power Point presentation that we […]
Nucor beat guidance forecasts with earnings of $245 million for the third quarter of 2014, up from $147 million in both Q2 2013 and Q3 2013. Consolidated net sales increased 8 percent to $5.70 billion. Strong third quarter earnings were attributed to improved performance in sheet steel, structural, bar, and plate steel that was partially […]
The steel market seems fragile right now said members on this morning’s monthly steel conference call hosted by the Heating, Air conditioning, Refrigeration Distributors International (HARDI). Pricing is beginning to slip as demand remains steady was the consensus of most callers. A HVAC wholesaler noted the mills are “negotiating more readily than they were at […]
Steel Market Update received the following from a member of the financial community regarding consolidation and its impact on the steel industry both short and long term. I am reproducing the email in its entirety and you are welcome to add your comments: “Hope you are well. Wanted to touch base on your recent steel […]
We have selected the hotel we will be using for our next Steel 101 workshop (January 20-21, 2014). The hotel will be the Charleston Harbor Resort & Marina and we have a great off-season rate. We should have more details on the hotel and have the reservations system set up by the middle of this […]
After the recent sell off of HRC futures, it appears the market has reached a critical support level with Cal 15 trading at $620. Near months aren’t much higher with Nov14 trading around $623 and Dec14 at $621. The selloff came as concerns over the global economy came to light in recent weeks. The International […]
Besides working on flat rolled steel pricing for most of the week, I have also been interviewing companies by email and over the phone to learn more about demand and how demand is holding up as we get deeper into 4th Quarter 2014. This becomes an even more important topic when considering rising inventories at […]
SMU was reading a blog post put up by Metal Miner this morning regarding the consolidation of the steel industry. The main premise of the guest article from James May of Steel-Insight out of Canada, was 81 percent of the hot rolled production in the United States and Canada is controlled by four companies: ArcelorMittal, […]
Steel Market Update recently published an article about the beginning of the 2015 non-automotive flat rolled steel price negotiations between end users, service centers and the domestic steel mills. We continue to gather information regarding the status and tone of the negotiations and we are learning that 2015 will be much different than what transpired […]
Big River Steel has asked the Arkansas court to dismiss a federal lawsuit by Nucor Corp aimed at preventing construction of the new mill. In documents filed Friday, Big River steel called the suit by Nucor “a scorched earth campaign.” Nucor claims that Big River Steel’s mill will violate the Clean Air Act, an allegation […]
We are in a very interesting market as many factors are influencing domestic scrap and steel prices. We discuss currency issues in tonight’s issue as the appreciating dollar means less competitive exports out of the United States but it also makes foreign steel imports more attractive to buyers. We have falling iron ore (which is […]