Analysis
Final Thoughts
Written by John Packard
July 21, 2017
Boy, am I receiving mixed messages – more than I think I ever have before during my 40 year plus career in (or covering) the industry. My opinion is the mixed messages are due to the interference in “normal” market operations by the Trump administration. This is especially destructive when promises are made for Section 232 recommendations and the date goes by with nothing. At the same time, the president is telling people that the steel industry is going to be so happy with what he is going to do, and nothing gets done. The creates indecision within the industry.
So, on one hand we have the domestic steel mills announcing higher steel prices and, at the same time I have a conference call with HARDI wholesalers who tell me that prices have barely budged and competition from service centers indicates no issues with inventories. There is plenty of steel on the service center floors according to SMU sources. MSCI sees it differently. More mixed messages.
When looking at our survey results we found the approximately 50 service centers responding to last week’s questionnaire reporting inventories at 2.3 months. Thirty-seven percent of those same distributors reported having “off the books” inventory which makes capturing the accurate inventory levels that much more difficult. We will have more on this subject in Tuesday evening’s newsletter.
Another busy week ahead. I will be in my office all week working on pricing, reaction from the market, foreign steel offerings and service center inventories. Stay tuned.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
John Packard
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Final Thoughts
Sometimes an entire news cycle happens in one week.