Final Thoughts
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Final Thoughts
Written by John Packard
October 20, 2017
We have an article in tonight’s newsletter from Mario Briccetti that I want to make sure is not misconstrued as a criticism of the domestic steel mills. The Kobe Steel violation of trust by certifying test results for tests that were not conducted has created some unease here in the United States. It is Steel Market Update’s opinion that the U.S. steel mills are conducting all tests and are going the extra mile to ensure their customers are receiving steel as ordered. In my 40+ year career in the industry, I am unaware of a steel mill falsifying a mill certification.
The steel industry consists of much more than just steel mills. There are hundreds of service centers, trading companies, brokers, toll processors, wholesalers and fabricators that can touch steel and then send out certifications. There is a prime steel market and a secondary steel market. It is important to know who you are doing business with. And remember, sometimes there are reasons why the deal is too good to be true….
For those of you who are new to Steel Market Update, one of our practices is to take as impartial a position as possible when the domestic steel mills begin raising prices. As you can see by the graphic below, the domestic mills don’t always collect the increases as announced. In fact, many times the increases fall flat and are not collected at all. We use AK Steel as our benchmark for spot flat rolled price increases since they publish all of their increases on their website (www.aksteel.com) in the “news” section of the site. As of Sunday, AK Steel had not yet followed the AMUSA or Nucor lead.
We are aware there are times when Steel Market Update can influence the market and push prices in one direction or the other. We don’t want to do that. We prefer that the market decide what is justified based on supply/demand and perceptions about the industry. One of the first things we do is move our Price Momentum Indicator to Neutral – this is not a rubber stamp that the increase will be collected, just an acknowledgement that the mills are trying to change the dialogue in the market.
We will see what happens as we work on pricing and comments from industry sources on Monday and Tuesday of this week.
As always, your business is truly appreciated by all of us at Steel Market Update.
John Packard, Publisher
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John Packard
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Final thoughts
Sheet prices didn’t roar back after Labor Day. But steel market news sure came out of the gate strong (or maybe chaotically is the better way to put it). First, the nearly $15-billion proposed sale of U.S. Steel to Nippon Steel exploded into the news. And when I say exploded, I mean that all sides seem to be escalating things now.
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Final thoughts
Welcome back from Labor Day, from Steel Summit, and from whatever fun you might have had over the long weekend. Personally, I enjoyed camping with friends and family near Starved Rock. No one starved, there were no major injuries, and we enjoyed the many splendors of Mystical Fire. (Speaking of which, does that have industrial uses? But I digress.)
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Final thoughts
I want to say a huge ‘thank you’ from all of us at SMU to all of you (more than 1,500!) who attended Steel Summit this year. We appreciate you taking time out of busy schedules to join us – whether that was up on stage, submitting thoughtful questions, or catching up over a drink and bite to eat. Also, a bit shoutout to everyone at SMU and at CRU who made this event possible. It’s no understatement to say that we have a fantastic team.
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Final thoughts
Day one and two of SMU's Steel Summit 2024 are officially in the books. We covered a lot of ground, and the agenda sure did deliver.
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Final thoughts
The big show is just about here. SMU Steel Summit will be getting underway on Monday. Where does the networking begin? I’d say at the airport. So don’t forget your business cards. And it can't hurt to wear a company golf shirt.