Steel Products

Final Thoughts

August 7, 2013

SMU doesn’t normally publish obituaries. I found the one about Berthod Beitz former Chairman of Krupp Steel especially touching and important to acknowledge. For the younger generation the idea of death camps and the world at war must be quite foreign. Even those of us born after World War II have only faded memories of the war stories told to us as a child. When Vietnam came along our interest in WWII seemed to vanish. Sometimes it is good to remember and appreciate the past.

Rumors – the air was full of rumors regarding

the potential sale of the former RG Steel Mingo Junction plant (Wheeling Pittsburgh to us old timers). My understanding is no deal has been consummated as of this date but one is expected in the not too distant future. There is a chance that the EAF could come back to life during 1Q 2014. That is the rumor.

ThyssenKrupp Americas – don’t count out ArcelorMittal as the potential winner. CSN is still there but the deal cannot be finished – mostly due to issues at the CSA mill. ThyssenKrupp AG is still trying to get a deal before the end of their fiscal year – at the end of September.

A couple of the buyers essentially called the galvanized market as having hit its peak. “I can’t even fill holes at a $38.00/cwt base with the long lead times and [service center name deleted] selling at CRU,” is what one galvanized distributor told SMU earlier today. He went on to project the galvanized conversion mills would be the first to feel a weakening order book as buyers move to foreign or just stop buying.

This evening, Bank of America Steel Analyst Timna Tanners called a top to the current sheet steel market cycle. She told her customers in a note seen by SMU, “Despite steady and even improving demand, we expect prices are pressured over the next several months by: 1) restarted capacity; 2) imports, and; 3) seasonal pricing pressure.”

There is much to talk about and debate in the days and weeks ahead. We always appreciate comments from our readers which you can do by contacting me directly at: John@SteelMarketUpdate.com.

As always your business is truly appreciated.