Final Thoughts
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Final Thoughts
Written by John Packard
April 3, 2020
There is going to be a rush of bad news flooding televised and online media. Here at Steel Market Update, we and our parent company The CRU Group will do everything we can to keep readers advised with the most accurate and timely information possible.
This is one of the reasons we are beginning our weekly SMU Community Chat webinar. The webinar will be just 30-45 minutes in length so we do not take a lot of time out of your day. We are going to tape the webinar so those who have conflicts can view it when time permits. We will conduct the webinar on Wednesday mornings at 11 a.m. ET. We will provide a link and password for each webinar, which will be in our article in Tuesday evening’s issue, or we will email it directly to you. You can also request the link and password by email at info@SteelMarketUpdate.com. If you have not used Zoom before, when you click on the link we provide you will be prompted to download their software (free) so you can view the webinar.
The subject for this Wednesday’s SMU Community Chat webinar: CRU Steel Sheet Forecast 2020-2021 with a concentration on how mill cuts in production mesh with CRU’s view of future demand.
I have never been a proponent of daily spot prices for the flat rolled or plate markets. Today, due to the lack of actual transactions, any daily price would be predicated on just a handful of numbers.
We recognize there will be fewer data points as we work on our spot numbers on a weekly basis. We are addressing the number of data points as we work to improve our surveys, expand the number of one-on-one contacts and speak directly to more mills. At SMU our goal is to provide the range of numbers that exist in the spot markets. We then take the high and low of our range, add them together and divide by two to ascertain our average for the week.
It is critically important that those invited to participate in our surveys, email questions or direct phone calls provide as much accurate and timely information as possible. We keep the sources of all the information we collect confidential; we do not share where the data comes from and we never reference an individual or company name.
I listened in on the virtual lunch conducted by Timna Tanners, steel and mining analyst for Bank of America Merrill Lynch, on Friday of this past week. A couple of quick notes from the comments made by active participants in their respective markets: Scrap dealers are having difficulties collecting scrap; one executive told the group they had shut down peddler scales (where they buy scrap from off the street). Prime scrap suppliers are shut down and expected to be down for the remainder of this month (April). There is a lot of resistance to scrap prices going down by $50 per gross ton, which is where the mills are offering to buy right now.
On the same call, a couple of trading companies addressed the group and pegged foreign hot rolled at $345 to $380 per metric ton, FOB Export Port. The expectation is for foreign HRC to go down to $300 per metric ton. The belief by the traders is that domestic (U.S.) HRC prices could bottom around $400 per net ton. Right now, the foreign numbers are not attracting much interest from U.S. steel buyers.
One manufacturer told the group his company had just purchased domestic HRC at sub-$500 per net ton.
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As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO
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John Packard
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Sheet prices didn’t roar back after Labor Day. But steel market news sure came out of the gate strong (or maybe chaotically is the better way to put it). First, the nearly $15-billion proposed sale of U.S. Steel to Nippon Steel exploded into the news. And when I say exploded, I mean that all sides seem to be escalating things now.
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Welcome back from Labor Day, from Steel Summit, and from whatever fun you might have had over the long weekend. Personally, I enjoyed camping with friends and family near Starved Rock. No one starved, there were no major injuries, and we enjoyed the many splendors of Mystical Fire. (Speaking of which, does that have industrial uses? But I digress.)
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I want to say a huge ‘thank you’ from all of us at SMU to all of you (more than 1,500!) who attended Steel Summit this year. We appreciate you taking time out of busy schedules to join us – whether that was up on stage, submitting thoughtful questions, or catching up over a drink and bite to eat. Also, a bit shoutout to everyone at SMU and at CRU who made this event possible. It’s no understatement to say that we have a fantastic team.
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Day one and two of SMU's Steel Summit 2024 are officially in the books. We covered a lot of ground, and the agenda sure did deliver.
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The big show is just about here. SMU Steel Summit will be getting underway on Monday. Where does the networking begin? I’d say at the airport. So don’t forget your business cards. And it can't hurt to wear a company golf shirt.