Letter to the Editor: Price Increases, Vietnam, Construction Markets

1.So we are banking on AK (who does not know what a HRC looks like) as the bellwether of the market?  Why the mills came out now with this announcement is baffling but they are steel mills….

2.I think June/July will be peak for imports until we get to 4th quarter when CSN may start deliveries to US again.  My sense is that Vietnam got overwhelmed with US buys and China HRC pricing in the March/April time period and just found their footing again in May/June.

3.The CRC final duties are announced July 8th?  If those penalties are as harsh as the coated, that may have an effect.

4.Do not put it past the US mills to kibosh Vietnam and others at some point. I think they will wait until the Brazilians begin offering again although I am not clear on the “rules” anymore at all.  Vietnam needs to wise up but the 2nd tier guys are not at all sophisticated and the traders and buyers are pushing them down in price which is scary.  There are political issues with both Vietnam and Turkey but one would have thought the same about Korea.

5.The biggest market that all of this is affecting is construction where everyone wants an edge and no one has one.  And let’s not forget that SDI will be running ZNAL [Galvalume] out of Columbus in October? That is the market that will continue to be oversupplied.

SMU Note: We don’t use AK Steel as a benchmark or “bellwether” for the industry. The one thing that AK Steel does is to report their price increases by publishing a press release. This makes it easy for everyone to follow and to understand. We have a feeling AK knows what a HR coil looks like, their preference is probably to add value to it and sell more cold rolled and coated steels – especially when the spread between HR and CR/Coated is $200 per ton.