Final Thoughts
Final Thoughts
Written by John Packard
May 11, 2016
Good evening (or Good Morning depending on when you read our newsletter) from Chicago. The mood is upbeat by most attending the Boy Scout Dinner due to the rising steel prices which have helped service centers and steel mills get healthier.
A couple of secondary steel service centers told me that their business has also been affected by the tightness in the market. At the beginning of my steel career I sold secondary galvanized steel. So, I was asking how the end customers of the secondary service centers were reacting to price and quality (secondary buyers can sometimes be a little claim happy). I was told that the market has changed. Service centers are walking away from the stubborn buyer who hasn’t yet accepted reality. One east coast secondary service center told me about a structural steel buyer who, in the past, refused to accept grade 60 coils. Now, the service center was being chastised by that same end user for not offering the same grade 60 coils to them (of course we can use them…!).
Having lived through the shortage years of 2004 and again in 2008 there was discussion about whether 2016 was the same kind of market as those years. From my perspective I don’t think so. Demand is not as strong as it was during those periods of time. The other thing that I am not seeing is any of the domestic mills renegotiating prices on existing orders. I am seeing longer lead times and some lateness but nothing like what happened during 2004 and early 2008.
And, everyone remembers what happened at the end of 2008…
Thank you to everyone I spoke with for your kind words about Steel Market Update (newsletter) and our Steel Summit Conference. I hope I see you all again in Atlanta at the end of August (29th – 31st).
It was nice to see a number of our former Steel 101 attendees at the dinner this evening. We learned a number have been promoted (some a number of times) and all were doing well. We are doing our next Steel 101 in Sylvania, OH next week. I am looking forward to a new crop of attendees. Our next one will be in November in Memphis, Tennessee with a tour of the Big River Steel.
As always your business is truly appreciated by all of us at Steel Market Update.
John Packard, Publisher
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?