Final Thoughts
Final Thoughts
Written by John Packard
April 22, 2019
Non-coated flat rolled and plate prices are under pressure and there is worry coming from steel buyers about the second half of this calendar year. I am hearing mixed results regarding actual demand. The weather has finally broken in the north and products such as the metal building industry are seeing significant gains. We also anticipate a stronger energy market as we are hearing of jobs that still need to be placed.
Here is what the general manager of one of the larger service centers had to say to me earlier today, “I think things are getting looser for sure. Lead-times have stalled and have come backwards in some cases. When we consider the myriad maintenance outages being taken between now and June, and we still see lead-times weakening, it portends bigger challenges ahead. Lower scrap prices and still relatively high imports are only adding to the challenges the mills will face in the weeks ahead. There’s also newer indications that demand levels may be weakening on a more broad and sustained basis, but it’s difficult to discern whether this is temporary or a more long-term issue. Hearing that customers are catching up on past due order books and that future outlooks aren’t as rosy as hoped. The exception remains to be in the energy sector where large projects are still being consummated, and a number of them are on the board for the coming months…”
From another distributor we heard, “Pricing continues to ebb and flow a few dollars every day and the major trade publications are now publishing daily rumors and unconfirmed transactions, which lead to even more confusion. But generally, supply and demand are in relative balance with future pricing contingent on demand, imports remain subdued and, at least in flat rolled, no new additions are anticipated for the immediate future.”
Well, we do have the Nucor Gallatin galvanizing line coming up in the next few weeks…
A service center who is plate focused provided some insights on the plate market. “Plate prices are softening. SC resale is softer than the mills (SC’s are in inventory purge mode). I think plate has a little more downside, maybe to $44.00 delivered as we get into June and July 4th. Resale at $47 – $48.50 USA, import a little cheaper. It is really a game as to whether the mill lead times or SC inventory levels drop to ‘reaction required’ levels first. My gut is that the mills can hold out, and that will put a floor in falling prices at not too much below $45.00, provided demand holds reasonably well.”
SMU had the plate price at $920-$980 per ton tonight.
The Metals Industry supports the Chicago area Boy Scouts with a large industry dinner, which this year will be held on Thursday, May 9, at the Hyatt Regency Hotel in downtown Chicago. There are still some tables/tickets available. Tim Triplett and I will both be there from Steel Market Update. For more information about the dinner and how to register, please click on this link. Prior to the dinner there tends to be a couple hundred steel people hanging out at the upper and lower bars in the Hyatt Hotel.
There are 125 days before the beginning of the 2019 SMU Steel Summit Conference (Aug. 26-28). SMU Steel Summit Conference registrations can be found at this link. Should you have any issues with the registration link or the registration process, please contact us at events@SteelMarketUpdate.com or contact Brett Linton at 770-299-9897.
We have put the listing of companies that are registered for this year’s conference on our website: www.SteelMarketUpdate.com/Events/Steel-Summit If you do not see your company, or if you think there should be multiple people registered and there is no * after the company name, please reach out to Brett@SteelMarketUpdate.com and he will look into it for you. Every year we have companies and individuals who think they are registered when, in fact, they are not. Don’t get left behind. Register Today!
SMU Steel Summit Conference hotel room status – there are still rooms available in our room block. However, I think this is deceptive as we already have registrations that should fill 60 percent or more of the rooms. Last year the room block for the Gateway hotels (those closest to the convention center) was sold out in June. I expect the same to happen again this year. The hotels we are using are the Atlanta Airport Marriott Gateway Hotel, The SpringHill Suites Atlanta Airport Gateway Hotel, The Renaissance Atlanta Airport Gateway Hotel. We also have the Atlanta Airport Marriott Hotel, which is located about a mile away from the conference center. You can register by clicking on the links above, or you can contact 888-239-1203 and ask for the Steel Market Update room block.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard
John Packard
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