Final Thoughts
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
John Packard
Read more from John PackardLatest in Final Thoughts
Final Thoughts
It’s once again A Tale of Two Cities in the steel market. Some are almost euphoric about Trump’s victory. Others, some rather bearish, are more focused on the day-to-day market between now and Inauguration Day on Jan. 20.
Final Thoughts
One of the perhaps unintentional perks of being a trade journalist is the opportunity to travel and cover an array of industry conferences and events. Some I've attended have been at fun locations, like Palm Springs and Tampa, Fla. Others have been in more practical locations, like SMU’s Steel Summit in Atlanta and American Iron and Steel Institute (AISI) and Steel Manufacturers Association (SMA) meetings in Washington, D.C.
Final Thoughts
t this point in the game I think what we can say about Nippon Steel’s proposed buy of Pittsburgh-based U.S. Steel is that it will go through, it won’t go through, or the outcome will be something new and completely unexpected. Then again, I’m probably still missing a few options.
Final Thoughts
President-elect Donald Trump continues to send shockwaves through the political establishment (again). And steel markets and ferrous scrap markets continue to be, well, anything but shocking. As the French writer Jean-Baptiste Alphonse Karr wrote in 1849, "The more things change, the more they stay the same." (I thought the quote might have been Yankees catcher Yogi Berra in 1949. Google taught me something new today.)
Final Thoughts
President-elect Donald Trump will officially retake the White House on Jan. 20. I’ve been getting questions about how his administration’s policies might reshape the steel industry and domestic manufacturing. I covered the tumult and norm busting of Trump's first term: Section 232, Section 301, USMCA - and that's just on the trade policy side of things. It's safe to say that we'll have no shortage of news in 2025 when it comes to trade and tariffs.