Economy
Letter to the Editor: Marcus Forecast Doubtful
Written by Tim Triplett
July 5, 2018
Steel Market Update received the following comments regarding predictions made at the annual Steel Success Strategies Conference by Peter Marcus of World Steel Dynamics. Steel Market Update did not attend the conference, but we felt the substance of the issues raised by one of our readers would be of interest to all of our readers. We welcome any comments our readers may have on the subject. Here are the comments we received from one reader:
Comments made by Peter Marcus of World Steel Dynamics at the recent Steel Success Strategies conference were surprising. We feel it is highly unlikely HRC pricing in the U.S. will drop by his “estimated $200/ton by the end of 2018.”
It would take some combination of the following fundamental variables to occur for a decrease of that magnitude:
• A significant increase in supply.
• A significant decrease in demand.
• A significant decrease in raw material costs.
• Termination of tariffs/duties.
As it relates to supply, domestic mills remain disciplined in their production levels. Demand is strong. Raw materials are strong. Termination of tariffs is highly unlikely.
Marcus’ comment suggesting an “avalanche of foreign steel entering our country, probably in September” seems to hold little merit. We spoke with several trading companies who have confirmed they remain timid in their approach to importing into the U.S., regardless of pricing. The common feedback we hear is fear of additional trade action, fear of being put on a “quota list,” and hesitancy from U.S. consumers to place offshore orders, wondering if they will receive their steel.
Whether steel survival or steel success, Mr. Marcus certainly had a strategy. In this case, we just wish it would have been silence.
Midwestern Service Center Executive
(Name withheld on request)
Tim Triplett
Read more from Tim TriplettLatest in Economy
Architecture billings flat in October after months of contraction
Architecture firms reported stable billings in October, according to the latest Architecture Billings Index (ABI) released by the American Institute of Architects (AIA) and Deltek. This follows 20 months of contracting business conditions.
Trump taps Lutnick to be Commerce Secretary
President-elect Donald Trump has named Wall Street veteran Howard Lutnick as the new US Secretary of Commerce.
New York state manufacturing activity ramps up to multi-year high
New York state’s manufacturing sector saw substantial recovery in November, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York.
CRU: Dollar and bond yields rise, metal prices fall as Trump wins election
Donald Trump has won the US presidential election. The Republican party has re-taken control of the Senate. Votes are still being counted in many tight congressional races. But based on results so far, the Republicans seem likely to maintain control of the House of Representatives. If confirmed, this will give Trump considerable scope to pass legislation pursuing his agenda. What this means for US policy is not immediately obvious. Trump will not be inaugurated until Jan. 20. In the coming weeks and months, he will begin to assemble his cabinet, which may give a clearer signal on his policy priorities and approaches. Based on statements he made during the presidential campaign, we have set out the likely direction of his economic policy here and green policy here.
ISM: Manufacturing index fell in Oct to lowest point of ’24
Domestic manufacturing contracted for the seventh straight month in October, according to the latest report from the Institute for Supply Management (ISM). This marks the 23rd time in the last 24 months that it has been in contraction.