Final Thoughts

February 4, 2019

One constant I am hearing during my phone and email conversations is that January was a good month for shipments and February has started out strong. The construction community is pleasantly surprised, and I really have not heard anyone say business is bad in any market segment.

One of the mills pointed out that much of the foreign steel that came in during the months of December and January is “out of the money” (too expensive versus current domestic pricing). We also learned global pricing is moving (up). The Vale situation is impacting iron ore spot prices (up).

I expect inventories to drop when we finish our analysis of January numbers. I did speak with one of our service center data providers yesterday and he told me their inventories dropped from 2.7 months of supply at the end of December to 2.0 months. All due to a very strong shipping month during the month of January. One small snapshot. We will have our Flash Report ready for service center data providers on Friday of this week. If you have not yet submitted your data, let me know and I will get you the link. Also, if you are a service center or steel wholesaler and you would like to participate in our inventories analysis (flat rolled and plate products only at this time), please contact me: John@SteelMarketUpdate.com

I am beginning to hear whispers of a second increase. Some believe another $20 per ton is coming in an effort to push the numbers out. We are also hearing that the increase will come on the heels of higher world prices for scrap, iron ore (Vale announced a force majeure today), slabs and billet prices will follow. As one of our sources put it this evening, “It is going to get mighty interesting here [over] the next couple of weeks.” Our source believes the second increase will come as import bookings are “few and far between” as international prices rise coupled with the 25 percent tariff making foreign steel even more prohibitive. Watch for it.

We only have a very few sponsorship spots left for the 2019 SMU Steel Summit Conference. We are also selling the exhibition space at a much faster pace than we did one year ago. If you would like information about either becoming a sponsor or exhibitor, please contact Jill Waldman at: Jill@SteelMarketUpdate.com

For those of you who do not realize it – SMU has a new system regarding renewals, new accounts and upgrades to existing memberships. We are trying to be more personable and proactive by asking that you speak with Paige Mayhair. She can walk through the new options we have and help you get the right product for your needs. Paige can be reached at Paige@SteelMarketUpdate.com or by phone at 724-720-1012.

Next week I will be in Tampa for the Port of Tampa Steel Conference. I will be the Master of Ceremonies for the event. If you are planning on attending, stop by and say hello. I will be there on Monday night, Tuesday and Wednesday.

The State of the Union is this evening. Maybe President Trump will give us some hint about the Section 232 tariffs on steel and the Section 301 tariffs (or potential tariffs) on Chinese-produced products?

As always, your business is truly appreciated by all of us here at Steel Market Update.

John Packard, Publisher