Final Thoughts

May 9, 2016

My final thoughts are going to be short this evening. The word that keep going through my head today as I spoke with buyers and sellers of steel was “worry.” The number of people who worry about what is going to happen next seems to be growing by leap years on a daily basis. I remember quoting a service center who participates in the HARDI conference calls in the last HARDI article I wrote. “We are one mill accident away from chaos” is how I remembered it (off the top of my head, so it may have been slightly different but I think you get the idea). Since then we have had two incidents and we still are not quite sure what the final impact will be with CSN or North Star BlueScope. Worry…

The financial community is worried about what is happening in China. Extremely worried.

Steel buyers are worried about billet offers to Turkey – how will that affect scrap prices here in the United States? Worry.

Steel buyers are worried about buying too much high priced inventory. No one wants to be anywhere near upside down when the market does make its turn. Worry.

There are concerns (worries) about margins and margin compression. After all how easy is it to tell your best customer that the price he bought at last week is now $100 per ton higher and you can only give him 75 percent of what he wants? Worry.

I think there will be plenty to discuss during our 6th Steel Summit Conference in Atlanta at the end of August. We hope we will be able to dissipate some of the worries and replace them with good information, excellent networking opportunities and new challenges to look forward to. You can find more information about the conference on our website: www.SteelMarketUpdate.com.

I will be in Chicago beginning tomorrow evening and will be attending the Boy Scout Dinner on Thursday evening. I hope to see you there.

As always your business is truly appreciated by all of us here at Steel Market Update.

John Packard, Publisher