Final Thoughts
Final Thoughts
Written by John Packard
September 28, 2016
The complaint filed by the domestic steel mills against China for circumvention of duties by converting Chinese substrate in Vietnam and then shipping it to the U.S. as Vietnamese products goes against trade rules that have been in place for many years. It has been understood that transforming hot rolled into cold rolled and/or galvanized is significant transformation thus changing the HTS codes (Harmonized Tariff Schedule). So, it appears the domestic mills are trying to use the political climate in an effort that the U.S. can overturn (overlook) what has been in place since 1988 and is recognized by 200 countries around the world.
As trade attorney Lewis Leibowitz mentioned in a previous article on the subject, the US Department of Commerce has the flexibility to rule in favor of the domestic steel mills. Most likely, any ruling in favor of the domestic mills (should that happen) would be over-turned by the World Trade Organization.
For the moment, the goal appears to be to diminish the amount of Vietnamese cold rolled and coated coming into the market. At the moment the mills are somewhat successful. I say somewhat because not everyone in Vietnam is fleeing the market.
I would expect orders to the UAE (United Arab Emirates) to increase in the coming months.
A quick note to let everyone know our Steel 101 workshop scheduled for Memphis in November is now officially sold out. We will announce when and where our next workshop will be held soon.
We have had a large influx of new trial members ever since our conference. I want to welcome you to Steel Market Update – which is both our newsletter and website. Please take the time to acquaint yourself with both. If you have questions about the website (or how to use the website) please contact Brett@SteelMarketUpdate.com and he can assist you. If you have general questions or suggestions you can send them to info@SteelMarketUpdate.com and if you would like to speak to me directly you can do so at: John@SteelMarketUpdate.com or by phone at: 800-432-3475.
Yesterday, I spoke with the head of purchasing for a major metropolitan area. We spoke about the difficulties they were having with being able to understand when prices were moving and how to justify price increases. I provided the gentleman some options (including non-SMU products). He sent the following email later in the day, “John, thank you for returning my call and taking the time to speak with me earlier today. I found our conversation illuminating and educational. I’ll briefly research the pricing sources you mentioned (i.e. CRU, PLATTS and TSI) but I’m probably going to need to rely mostly on the BLS PPI index for as the basis of escalation language in the current project I’m working on due to time constraints… I will however give careful thought to the complimentary subscription posted on your web page. Again, I found your site to be very well organized and loaded with useful steel industry information.”
I welcome any of our free trials to give me a call (and better yet to sign up to become a member/subscriber) and I will do my best to help.
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
What's going to be the next big thing in steel?
Final Thoughts
Based on the amount of ‘out of office’ replies we’ve been receiving and the results of this week’s steel buyers’ survey, those pesky summer doldrums have arrived for the steel industry.
Final Thoughts
Maybe some of this uncertainty will get ironed out ahead of Liberation Day tariffs resetting higher rates on July 9. But if I had to place a wager, it would be on more drama and last-minute brinksmanship - whether it comes to the Liberation Day tariffs or the various Section 232s that are in the works.
Final Thoughts
What should you keep your eye on, considering the latest geopolitical events?
Final Thoughts
Not many people in the North American steel market had direct US involvement in another Middle East conflict on their bingo card. Prices weren't expected to shoot higher unless something unexpected happened. That unexpected something has now happened. And there is talk of oil at $100 per barrel. What does that mean for steel?