Final Thoughts

April 27, 2017

The industry is abuzz with all kinds of speculation as to how the Section 232 investigation will impact traders and steel buyers. Another Section 232 was announced and should have been signed by President Trump today covering aluminum. I was texting with one of the steel mills this morning about their access to aluminum for coating aluminized and Galvalume steels. There is a question as to whether the investigation will cover aluminum ingots versus aluminum sheet (used in autos, cans, etc.). The mill advised me that their attorneys were already preparing to make comments to the Department of Commerce to make sure they did not lose their sources of supply.

Lewis Leibowitz and I have spoken a few times over the course of this week. There are so many issues being raised that I am considering putting a program on defining each trade issue being considered and how decisions are (will be) made and how they are/could affect manufacturing companies, service centers, steel mills, etc. I think it is important that our SMU Steel Summit Conference attendees understand what is a Section 232, Section 201, Section 337, Antidumping, Countervailing Duty and Circumvention. In the case of circumvention there may be more complaints similar to Vietnam/China. The Final Determination on the Circumvention complaint is due on September 3rd unless it gets extended. We should have a Preliminary Determination over the next couple of months. There is also this issue of “self-initiation” which is essentially what the Trump Administration is doing with the Section 232 investigation. Even though Commerce has 270 days (9 months) we believe the announcement will come out much sooner than that. We saw a comment attributed to President Trump suggesting the process could be done within 50 days…

There will be much debate about “free and fair” trade and if punitive duties against foreign steel are actually hurting or helping manufacturers and the U.S. economy. Come join us in Atlanta on August 28-30th. You can find agenda, costs and registration information on our website or by contacting our offices: 800-432-3475 or 772-932-7538.

I will advise if we do put on a Pre-Summit Program on this subject in the coming days. This will not affect the existing program we have now for Steel Negotiations: Gross Margin Alignment, Lining Up Cost and Sales, How to Mitigate Risk with a Risk Strategy and Volatility Reduction for your company. The Steel Negotiations segment is being conducted by the consulting firm Applied Value Group with Associate Partner Ryan Huff leading the 1.5 hour segment. If we add a program on understanding the various trade issues it would be held before the Steel Negotiations program. Make your plans to be in Atlanta by 1 PM on Monday (or before) if at all possible.

Also, a quick note – our hotel block at the Marriott Gateway is about 80 rooms from being sold out. We also have a block across the street at the SpringHill Suites which we will open once we have exhausted what we can do with the Marriott. If you are planning on attending I suggest you make your room reservations now.

Our Steel 101: Introduction to Steel Making & Market Fundamentals Workshop will be in Ontario, California on June 22-23, 2017. We are holding the workshop later in the week in order to make sure that California Steel furnaces and hot strip mill will be in operation during our tour of the facility. You can find information about the workshop on our website or feel free to contact me since I am one of the instructors and best able to tell you what to expect during the workshop. I can be reached at John@SteelMarketUpdate.com or by phone at 800-432-3475. We intentionally hold down the total number of attendees so that we can focus as much one-on-one time with each as possible. Come join us in California!

As always, your business is truly appreciated by all of us at Steel Market Update.

John Packard, Publisher