Final Thoughts
Final Thoughts
Written by John Packard
November 8, 2017
The expectation, even among the naysayers, is there will be a bounce in flat rolled prices once lead times reach the end of December and into the New Year. The expectation is that the domestic steel mills will raise prices in the coming days. We have heard rumors that the first mill to move may come as early as next week.
One steel buyer told us that the first increase back in October was to put a bottom on the market and to then hold on until lead times get through the end of the year. With hot rolled lead times at three to six weeks, we are getting close. Cold rolled and coated lead times should be a week or two further out. Some of the mills are already sold out for the year. Others are getting close.
A good example is NLMK USA where the Portage steel mill, which SMU will be visiting in March with our Steel 101 workshop, is quoting their HRC lead times as being the week of Dec. 25, the last week of the calendar year (with limited tonnage available). Their Farrell facility, which works from slabs, has HR out two to three weeks, but cold rolled and galvanized are in mid to late December.
Nucor Berkeley is quoting mid to late December on hot rolled, and most cold rolled and coated products are already into January promise dates. This puts Nucor in a good position to potentially be the first to come out with the next price increase.
Of concern is what’s happening in the rest of the world. If prices are weakening abroad, will that bleed into the U.S. markets come early next year?
Hot rolled appears to be the strongest product right now. The domestic mills are vulnerable on cold rolled and coated because of the wider spreads (which we have talked about on many occasions including one of our import articles in tonight’s issue).
I continue to have the SMU Price Momentum Indicator at Neutral – not so much because I feel prices will not rise in the coming weeks, but more because there doesn’t seem to be the strong support from the service centers that is needed to stair-step prices higher. We seem to be in a wait-and-see mode.
Stay tuned.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
John Packard
Read more from John PackardLatest in Final Thoughts
Final Thoughts
And just like that, we’re wrapping up the last SMU newsletter of 2024. We’re closing out our 19th year and looking with wide-eyed anticipation to what 2025 will bring.
Final Thoughts
SMU looks back at stories from Decembers past, one, five, 10, and 100 years ago.
Final Thoughts
It's that time of year again. You know, that time when people wonder if those things are drones in New Jersey or if the aliens are ready to come onto the stage just in time for Inauguration Day. What will that do for steel price volatility? In any case, the SMU team finds itself in Pittsburgh this week.
Final Thoughts
The Community Chat last Wednesday with ITR economist Taylor St. Germain is worth listening to if you couldn’t tune in live. You can find the replay and Taylor’s slide deck here. You can also find SMU reporter Stephanie Ritenbaugh’s writeup of the webinar here. Taylor is Alan Beaulieu’s protégé at ITR. Many of you know Alan from his talks at SMU Steel Summit. I found Taylor’s analysis just as insightful as Alan’s.
Final Thoughts
Cracks have formed in what has been presented as the Biden administration’s united front against Nippon Steel’s play for U.S. Steel. A report from the Financial Times said parts of the administration are at odds on the deal.