Final Thoughts

That was not the only rumor on the street that cost some shoe leather today. Some folks are speculating that U.S. Steel may be looking to divest its mill in Kosice to raise cash to complete its purchase of Big River Steel. Others say they have heard that USS plans to close Great Lakes and Granite City permanently and that the Mon Valley project will be terminated. We cannot confirm. U.S. Steel executives will no doubt be asked to respond to these questions during their second-quarter earnings call tomorrow.

Steel Market Update’s Price Momentum Indicator has been pointing firmly Lower since late March, but there was a subtle shift in the wind this week. With reports of mills firming their offers and scrap prices possibly increasing in May, we opted to move it to Neutral. That does not mean we believe prices have found the bottom or that they will soon begin to rise. It just means that we believe it’s prudent to wait until the market establishes a clear direction before we report on momentum.

John Packard made the prescient decision to move the Price Momentum to Neutral a few hours before we learned that ArcelorMittal was raising prices. AM notified customers that it was setting a base price of $500 for hot rolled and $700 for cold rolled and coated, effective immediately. Expect other mills to follow. If successful, that increase would amount to about $40 per ton from the current prices published by SMU.

Mills seem to have a way of always announcing price increases late in the evening (as if we won’t notice), right when we are on deadline. Makes for a long day.

Given all the craziness in the steel market, don’t forget to log in to our next SMU Community Chat at 11 a.m. ET on Wednesday, May 6. Guest speaker will be Timna Tanners, highly respected metals and mining analyst for Bank of America. You can register by clicking here.

As always, your business is truly appreciated by all of us at Steel Market Update.

Tim Triplett, Executive Editor