Final Thoughts
Final Thoughts
Written by John Packard
June 20, 2016
Two steel mills announced price increases today. This is the beginning of the 6th round of increases since the first announcement in early December 2015. However, unlike past announcements this one just doesn’t “feel” the same.
We are not seeing a rush to buy (unless it was a special deal at much less than the number suggested by ArcelorMittal). We will be working on where demand is on flat rolled products but, our initial read of the market is demand is “decent” but not necessarily as strong as expected. This is something we will be working on in the coming days.
I did do a quick check with a couple of trading companies to see what offers are out there. There is a belief among some buyers that there is a flood of import coming but we are not seeing it. We are not aware of any hot rolled offers in the market at this moment. With the U.S. being the highest priced market in the world to not have at least a few HR offers is quite unusual.
Cold rolled is being offered out of Vietnam and Turkey around $660 ($33.00/cwt). We have heard rumors of $30.00/cwt Houston but I haven’t been able to confirm the source.
We heard Vietnamese .019 G30 galvanized was being offered at $750 per metric ton, Ex Vietnam. To put that into some perspective the $750/MT + $100/MT (freight/insurance, etc.) = $771 Net Ton ($38.55/cwt). If you were to take coating extras into account, .019” G30 at $4.20/cwt + $2.00/cwt thickness extra = $6.20/cwt ($124/NT) brings the pricing down to a $32.35/cwt base. The ArcelorMittal announcement today of $830 per ton base on galvanized ($41.50/cwt+$4.20 + $2.00 = $47.70/cwt or $954 per ton). The Vietnamese .019 G30 galvanized product is at least $183 per ton below AM price (and NLMK is even higher than AM)…
Of course the question really is, what will the price of .019 galvanized be in January 2017?
A special thank you to Cargill which came on this week as a sponsor to our upcoming Steel Summit Conference in Atlanta. Cargill joins Pacesetter, Big River Steel, Mill Steel, Tennessee Steel Haulers, Steel Dynamics, Magic Coil Products, Alliance Steel and Kenwal as our other sponsors. We do have a couple of spots left should you be interested in becoming a sponsor or an exhibitor. Contact me at info@SteelMarketUpdate.com and we will provide more information as to what remains.
As always your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
John Packard
Read more from John PackardLatest in Final Thoughts
Final Thoughts
Sometimes new presidential administrations hit the ground running. No time for change like the present. And sometimes new administrations blast off on a SpaceX rocket bound for Mars. There’s a big universe, and we’ve got a lot of flags to plant. Such seems to be the case with the new Trump administration.
Final Thoughts
What’s been the impact of tariff threats on prices and demand? In short, not much – or at least that was the case when I was writing this column on Sunday afternoon. Spot activity for Canadian material, for example, has been put on hold over the last few weeks while the market waits to see what the new tariff landscape might look like.
Final Thoughts
Next Monday marks the start of the second Trump administration. The limbo we’ve been living in since Election Day in early November will finally come to an end. What better way to take a look at what’s coming up in Washington, D.C., than a conversation with Steel Manufacturers Association (SMA) President Philip K. Bell. He […]
Final Thoughts
It’s another week of big headlines and ho-hum pricing moves – which is to say the start of 2025 is looking a lot like the end of 2024. Scrap has settled up $20 per gross ton (gt). Steel prices, however, were a soft sideways this week. Chalk it up to uneven demand and abundant supply. And while we’re not aware of any major outages, some of you tell us that you’ve lost some shipping days here and there because of the recent cold snap.
Final Thoughts
I wrote in a Final Thoughts a few years ago that it seemed all the swans were black. More recently, I’ve been asked by some of you what the wildcards are for 2025. You could probably make the case that all the cards are wild now.