Final Thoughts
Final Thoughts
Written by John Packard
December 13, 2019
New rounds of flat rolled price increases began on Friday with ArcelorMittal USA and NLMK USA taking the lead at $40 per ton. My expectation is the other mills will follow on Monday and Tuesday of this week.
Watch lead times – with some of the mills they are beginning to stretch. Steel Dynamics has been advising some of their customers that their galvanized order book for Columbus is in late February. Earlier in the week, the published SDI lead time sheet showed Butler as having mid-late January hot rolled, but all other products were either “inquire” or “closed” (P&O and painted).
Lead times indicate the strength of the order books and steel buyers need to stay close to their suppliers, and at the same time be aware of what the other mills are doing with their order books to make sure you don’t have a surprise.
SMU confirmed on Friday that Cleveland-Cliffs and soon to be AK Steel CEO Lourenco Goncalves will be one of our keynote speakers at the 2020 SMU Steel Summit Conference in Atlanta. Recently, Cleveland-Cliffs, an iron ore mining company, purchased one of their large customers, AK Steel. When the transaction is complete, Mr. Goncalves will be the CEO of both companies. He is always an entertaining speaker, and one willing to answer questions thrown at him from the audience. I think our 2020 attendees will enjoy hearing from Mr. Goncalves. The dates for the 2020 conference are Aug. 24-26 and it will be held at the Georgia International Convention Center in Atlanta.
As I mentioned the other day, SMU does have a limited number of seats available for the 2020 SMU Steel 101: Introduction to Steel Making & Market Fundamentals Workshop. The workshop is being held on Jan. 7-8 in Ontario, Calif. We will be touring the California Steel Industries steel mill as part of our workshop. We already have an interesting group registered to attend. If you have an interest in learning more about how steel is made, how it is rolled (flat, plate and long products), how various qualities of steel are made, how it is bought and sold, and what market forces influence pricing…you can find details on our website: www.SteelMarketUpdate.com/events/Steel101
On March 31 and April 1, 2020, we will conduct another Steel 101 workshop in the Portage, Ind., area. We will be touring the NLMK Portage electric arc steel mill as part of that workshop. Registration should be available sometime later this week, or by early next week.
A note about our publication schedule over the Christmas and New Year Holidays. We will not publish on Tuesday or Thursday (Dec. 24 and 26) as well as New Year’s Eve (Dec. 31). Our offices will be closed Dec. 24-26 and again on Dec. 31 and Jan. 1 for the holidays. We will publish on Sunday, Dec. 22 and Sunday, Dec. 29.
If you are looking to renew, upgrade or entertain getting your first subscription of Steel Market Update, you can do so through Paige Mayhair at 724-720-1012 or by email: Paige@SteelMarketUpdate.com
I am also available to answer any questions that you might have and can be reached at John@SteelMarketUpdate.com
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO
John Packard
Read more from John PackardLatest in Final Thoughts
Final thoughts
Whether it’s the twists and turns of the presidential election, the U.S. Steel deal, or just what’s happening with the movement of steel pricing, there has been no shortage of stories for us to cover.
Final thoughts
Cleveland-Cliffs is seeking $750 per short ton (st) for hot-rolled coil. That’s $20/st above where the steelmaker had been. It’s also $30/st above Nucor, which is at $720/st this week. We've seen prices increase incrementally this week. SMU's HR price, for example, stands at $690/st on average, up $5/st from last week. The questions now are whether a number well above $700/st will stick, whether other mills will follow Cliffs, and whether there is enough demand to support higher prices.
Final thoughts
We got a little flack for adjusting our sheet momentum indicators to neutral last week. To be clear, we didn’t adjust them to lower. Part of the reason we moved them to neutral was because there are some unusual cross-currents in the current market. On the news side, you could make a case that there should nowhere to go but up.
Final thoughts
I think all of us know that sometimes courtships go wrong. A misplaced word or deed and soon things can go sideways, and not in the prices sense. Such could be the case with Japanese steelmaker Nippon Steel’s play for U.S. Steel.
Final thoughts
We’re starting to see some impacts of the big trade case filed last week against imports of coated flat-rolled steel from 10 nations. Namely, we’ve heard that a range of traders have stopped offering material from Vietnam. An alleged dumping margin of nearly 160% will do that. Especially amid chatter of critical circumstances.