Final Thoughts

So, how did all of this happen in the first place?

Beginning with the steel shortage of 2004, I began writing a note to my steel customers around the United States explaining what was happening and why they were potentially getting screwed by their suppliers. I hoped that if I provided a solid case study about the flat rolled steel industry I could appeal to my customers to be proactive and not reactive to what was happening in the market. Most of them listened to me and were able to weather the storm quite well.

I did not stop writing when the market changed. There was plenty happening “behind the scenes” that I felt steel buyers and sellers needed to understand as they made their buy and sell decisions each and every month.

In August 2007 I was a sales agent for a domestic galvanized conversion mill called Winner Steel (it is now called Sharon Coatings and is part of the NLMK USA group). The mill had been purchased a couple of months earlier by the Duferco JV (a joint venture between Dufereco and NLMK). My days as an agent were numbered and I knew it.

So, I did what any good red-blooded sales agent getting paid based on tonnage sold would do. I sold the heck out of the mill as I waited for the axe to fall.

At the end of 2007 all of the agents were let go.  The question in my mind was, what was I going to do next?

What I did first was to continue to write about the steel industry. Now that I didn’t have the mill harness around my neck I was free to write about what I thought was important.

But what was I going to do? I knew 2008 would be a traumatic year for the steel industry and I did not believe going back into steel sales would be the smartest path for success.

So, in August 2008 I took what had been first a freebie for my customers, incorporated it and took it to the marketplace as a subscription service. I knew I fit into a niche that no one else was able to service.

At the end of September 2008 the market collapsed and many of the same customers who used to get the SMU newsletter for free stepped up and made sure that the company was able to weather the lean years of 2009 and 2010.

Just like your company 2008, 2009 and 2010 made me work harder and smarter in order to give what our new Steel Market Update customers needed and then came to expect.

Over time I also realized that my background, and those of my friends in the industry, were uniquely qualified to conduct steel training workshops and an independent steel conference.

Our 1st Steel Summit Conference was held in Las Vegas before less than 100 people (who paid $100 each to come). I borrowed a couple of my fraternity brothers from college, my wife and the folks at Metalcon to help make the conference a success. We made money that first year and every year since.

As I look back on the past eight years I am pleased that a product (our newsletter) that started out as a sales tool for my steel customers has become a respected vehicle viewed by a large portion of the flat rolled steel community.

We receive comments on almost a daily basis congratulating us for a job well done. Just the other day it was Cliffs Natural Resources CEO, Lourenco Goncalves who said, “Your newsletter is solid. Lots of real information and educated analysis. Great job.”

The same day that Mr. Goncalves made his remarks a trading company reminded me, “Negative press??? John you are the press in this industry so be careful what you ask.”

Each and every day, seven days a week, I think about not just what buyers want to hear and to understand but I have to balance that with what is fair to industry players be they service centers, steel mills, toll processors or suppliers to the industry. This is one of the reasons why over the past 8 years I have chosen not to forecast steel prices. I view my position in the industry as a watchdog and a publication that knows what questions to ask and what is going to be important to understand. Then Steel Market Update customers can then make their own educated decisions as to what they need to do at that point in time.

I want to take the opportunity to thank each and every customer that I have ever had both as a salesman in the industry as well as in my current position. Your support has allowed me to raise a family (buying my kids new shoes, which I am finding is a never ending responsibility), hire people and grow the company and has kept me motivated to do a better job each and every day. I try to treat our SMU customers as part of our SMU team. Your success helps define our success.

And to Scott, one of my early SMU customers (and a former steel customer of mine), who questioned back in August 2008 what would I have to write about in 30 days time…? I say plenty and there is much more to come.

I also want to thank my team: My wife Diana, Brett Linton who has been with me for 7 of the 8 years, Sandy Williams, Peter Wright, Ray Culley, John Eckstein, Steve Painter, Mario Briccetti and Alison Lalonde who just joined our team this month. I also want to thank Andre and Jack Marshall and David Feldstein who provide articles on the HRC futures markets.

As always your business and support is truly appreciate not only by myself but by my entire team as well.

John Packard, Founder, CEO and Publisher, Steel Market Update