Final Thoughts
Final Thoughts
Written by John Packard
July 8, 2019
Welcome back from the Fourth of July Holiday (at least here in the United States). Steel Market Update gave our employees a couple of days off as we prepare for the next big push all the way to Atlanta and the SMU Steel Summit Conference on Aug. 26-28.
A few minutes after I told those on the HARDI steel conference call to watch for a new round of price increases, Nucor laid another $40 per ton on the table. This afternoon ArcelorMittal followed suit to their customers. This means there have been $80 per ton in flat rolled price increase announcements over the past couple of weeks. Plate prices have not been increased and continue to stagnate.
One of the smaller steel mills, when told of Nucor’s second price announcement, reacted this way: “Big ask.” At the same time, we were told their coated prices have barely budged over the past two weeks. “The price would have spiked up on steel if they [domestic mills] weren’t producing so much.”
I had an interesting discussion with a mill CEO in Europe today regarding scrap prices. The discussion started with me stating that it appears scrap pricing may have bottomed in the U.S. The CEO disagreed, “There is not enough demand for scrap to prevent it from falling further,” he said. “Turkey is at the top of their quotas for Europe for all of 2019.”
There are lots of slabs coming into the U.S. market, and for every slab imported that means there is that much less of a need for scrap here. There were 950,000 net tons of slabs in warehouses from Brazil that go against their third-quarter quota. The quota is 380,000 to 400,000 net tons a month, and we learned there are 538,000 metric tons of new orders for July.
Watch Canada for a surge in slabs into the United States now that their Section 232 tariffs have been removed. I have heard Mexico is being careful not to surge.
The head of commercial for a domestic mill disagreed. Iron ore prices are way out of whack with scrap (iron ore prices are very high right now). I heard from this mill they were selling pellets to China and buying scrap for their own mills.
Also, Nucor’s outage on their DRI facility in Louisiana starts next month and it will be an extended outage.
All eyes are on scrap as we head into August.
Speaking of August – registrations are above 800 executives and continue to climb. We published a list of the companies that have registered to date in tonight’s newsletter. If your company is not on the list, go to www.SteelMarketUpdate.com/Events/Steel-Summit and click on the registration link.
Our next Steel 101 Workshop is Oct. 8-9 in Cincinnati, Ohio, and will include our first-ever tour of the Nucor Gallatin steel mill. Go to www.SteelMarketUpdate.com/Events/Steel101 for more details and how to register.
We continue to collect nominations for the 2019 SMU NexGen Leadership Award, which will be awarded during our conference. Go to www.SMUAward.com for more details.
All of us are back in our offices working away. If you need help with renewals, upgrades, new subscriptions or making payments for our conference or Steel 101 (should you have an issue with the online system), contact Paige Mayhair at 724-720-1012 or Paige@SteelMarketUpdate.com
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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