Final Thoughts

Rumor vs. Fact – I was speaking with Tim Triplett (our Executive Editor who recently joined SMU after a 19 year stint at Metal Center News) and we were talking about the “rumor” of a potential price hike by Nucor. Tim raised the question, as members of the media, is it appropriate for us to report on “rumors?” As I told him, what we have been reporting on are not really rumors, but actual conversations between multiple steel buyers and Nucor representatives. Had another mill told us that Nucor was about to raise prices, we would consider that to be a rumor and we would not report it. At the same time, if we receive a note about a price hike from only one buyer and we can’t get others to corroborate it, then we would not report it. The only exception might be if a steel buyer tells us about a mill price increase (or some other important event such as an equipment shutdown) and shows us a letter from the mill. Then we would consider that a fact, not a rumor. Even then we’d talk to other customers. Steel buyers find out things from their suppliers faster than we do. We want to get that information to all our readers as fast as possible.

Those of you who have been reading our newsletter over an extended period know that we try to be very careful once a price increase announcement is made. We do not want to be involved in pushing the market in one direction or another. This is one of the reasons why our SMU Price Momentum Indicator is now at “Neutral.” There is a question, at least in our minds, as to where will steel prices go from here – up, down or sideways? We will let supply, demand and the normal market forces determine that without our help.