Final Thoughts
Final Thoughts
Written by John Packard
July 23, 2014
A special thank you to Pacesetter Steel Service Inc. who has stepped up to sponsor our networking/cocktail reception to be held at the end of the first day of the SMU Steel Summit Conference in Atlanta. For those of you who are unaware the conference will be held at the Georgia International Convention Center (GICC) which is located immediately adjacent to the Atlanta Hartsfield-Jackson International Airport. The dates are September 3 & 4 and we hope you, or someone from your company will join us in Atlanta for what promises to be an exceptional program. If you would like to learn more please Click Here.
If you are unable to attend our conference this year we hope to see you next year (we are giving you a head’s up now that there will be a 5th Steel Summit Conference in 2015). If you like the speakers we have selected please tell your industry friends about us. Also, if the dates or location this year did not work in your schedule please let me know as we will be working on finalizing next year’s date and location (what do you think about same location but move the date to the week prior to Labor Day Weekend at the end of August).
I am hearing things appear to be tightening up again – especially in the North but not exclusively in the North. We heard from one service center earlier this evening that who told us that US Steel lead times have been steadily moving out one week – every week. His opinion was their order book appears to be at “equilibrium” with hot rolled lead times at 3 weeks in the South to 6 weeks at Gary Works.
During the Nucor conference call it was interesting to listen to John Ferriola speak about the major consolidation that has happened within the flat rolled steel industry over the past two years. We tend to forget about the demise of RG Steel and the three steel mills associated with their bankruptcy (Sparrows Point, Wheeling and Warren). Last year we had ArcelorMittal & Nippon Sumitomo purchase the ThyssenKrupp Calvert, Alabama mill and now we have AK Steel and Steel Dynamics rolling up the Severstal North American operations which include Dearborn and Columbus. In each case, a non-traditional or foreign owned mill either disappeared or became part of an existing operating mill within the United States. If you think about it there will have been approximately 18-19 million tons of capacity either shuttered or changing hands with maybe one more mill joining that list before the end of the year.
To put that into perspective, the AISI announced earlier this week that total domestic steel production for 2013 was 96 million tons.
Our friends at Armada Corporate Intelligence (Dr. Chris Kuehl being one of our keynote speakers at our conference) pointed out in their Thursday evening newsletter, GDP is estimated by the IMF, Fed and others for 3rd and 4th Quarter between 3-3.5 percent for each quarter. This would mean growth within the steel industry and we are picking that growth in demand within our surveys as well.
As always we thank you for your continued business which is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
Still hoping to see you – or your industry friends – here in Atlanta in early September…
John Packard
Read more from John PackardLatest in Final Thoughts
Final Thoughts
SMU looks back at stories from Decembers past, one, five, 10, and 100 years ago.
Final Thoughts
It's that time of year again. You know, that time when people wonder if those things are drones in New Jersey or if the aliens are ready to come onto the stage just in time for Inauguration Day. What will that do for steel price volatility? In any case, the SMU team finds itself in Pittsburgh this week.
Final Thoughts
The Community Chat last Wednesday with ITR economist Taylor St. Germain is worth listening to if you couldn’t tune in live. You can find the replay and Taylor’s slide deck here. You can also find SMU reporter Stephanie Ritenbaugh’s writeup of the webinar here. Taylor is Alan Beaulieu’s protégé at ITR. Many of you know Alan from his talks at SMU Steel Summit. I found Taylor’s analysis just as insightful as Alan’s.
Final Thoughts
Cracks have formed in what has been presented as the Biden administration’s united front against Nippon Steel’s play for U.S. Steel. A report from the Financial Times said parts of the administration are at odds on the deal.
Final Thoughts
It’s been another week of torrid speculation when it comes Trump and tariffs. And another week of mostly flat price movement when it comes to steel sheet and plate. As far as Trump and tariffs go, I think I might have lost track. We've potentially got 10% blanket tariffs on imports from China, 25% tariffs on imports from Canada and Mexico, 100% tariffs on the BRICs, and 200% on Caterpillar. Canada might be the 51st state. Mexico could be the 52nd state. But all can be resolved if you stop by Mar-a-Lago and kiss the ring?