Final Thoughts
Final Thoughts
Written by John Packard
June 3, 2019
I am in Washington, D.C., attending the joint SMA/AISI annual meeting. I had the unique opportunity to sit down with Phil Bell, President of the Steel Manufacturers Association, and the SMA board to discuss my viewpoints regarding various issues affecting the electric arc furnace manufacturers. The SMA got to see a few of the proprietary products being produced by Steel Market Update that I think will be beneficial to their businesses in the future.
One of those products is our Service Center Inventories project. SMU is analyzing the number of days of supply of flat rolled and plate steels being held on the floor of the service centers in the United States. We are also analyzing the percentage of inventory that is available to be sold into the spot market, and we are evaluating the number of days of supply of new inventory that is on order. Right now, this data is only being shared with our service center data providers. They receive a “Flash” report on the fifth business day of the month, and then about a week later our full status report. This allows them to make quick purchasing or sales decisions. If your company is a service center and you would like to be a data provider, please contact me at John@SteelMarketUpdate.com
I sat in on a joint press briefing conducted by the AISI and the SMA where most questions from the mainstream press were about the Section 232 tariffs as well as the new tariff announced by President Trump on Mexico. The message was delivered by an AISI/SMA panel that included: AISI President Tom Gibson (speaking at our conference this year); SMA President Phil Bell (also speaking at our conference); John Ferriola, President & CEO of Nucor; Roger Newport, CEO of AK Steel; and Mark Millett, President & CEO of Steel Dynamics (also speaking at this year’s conference). The message was very similar to past years in that the focus was on free and fair trade, currency manipulation and circumvention of U.S. trade laws.
I asked the mill CEOs to respond to questions that have been raised regarding the new capacity that has been announced, even though demand has not been growing in the U.S., and supply appears to be plentiful. Mark Millett responded by saying the subject had been “sensationalized” by the financial community. He said the real new flat rolled capacity being added to the market is around 6-7 million tons. In SDI’s case, they have identified the Southwest as the market most underserved including Louisiana, Texas, Oklahoma, Arkansas and Mexico. Those states utilize approximately 7-9 million tons. John Ferriola chimed in and said, “There should be more steel produced here [USA].” Millett went on to note that the U.S. is “short” steel, which is why we have so many imports.
The group did not appear to be in favor of the 5 percent tariff on Mexico, which President Trump announced last week. However, Phil Bell pointed out that there is much that can happen between now and June 10 when they are slated to become effective.
Registrations continue to mount for the 2019 SMU Steel Summit Conference. We are closing in on 650 executives as we march toward breaking our 2018 attendance record of 912 attendees. You can find information about the conference and how to register at: www.SteelMarketUpdate.com/Events/Steel-Summit or you are welcome to contact us at Events@SteelMarketUpdate.com or to call Paige Mayhair at 724-720-1012.
Paige is also the contact should you wish to renew your membership, upgrade to one of the new classifications that allow unlimited numbers of individuals from your company to receive our newsletters and access to our website, or to upgrade to Premium level service. She is also the person to contact should you be new to SMU and would like to subscribe.
By the way, apologies for the typo in Sunday’s issue stating that Trump’s proposed tariff on Mexico would start out at 10 percent. The correct figure is 5 percent.
I will be back in my office on Wednesday, June 5, and will not leave again until the 17th of June when I will be in New York City for the CRU Steel Briefing and Bank of America Merrill Lynch dinner.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO
John Packard
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