Final Thoughts
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Final Thoughts
Written by John Packard
May 18, 2020
With the expectation of higher scrap prices coming for the month of June, on top of the steep rise in ferrous scrap this month, the mills’ margins may well be squeezed, which will impact negotiations and pricing over the next few weeks. Most steel buyers anticipate a new round of price increases by late May into the beginning of June.
At the same time, automotive production is restarting and the price of oil is closing in on $30 per barrel. Automotive may well be back to full production by late June, while oil needs to exceed $40 per barrel before we see it having an impact on oil rigs and production in the U.S. Dr. Chris Kuehl was pretty optimistic last week when he called for oil to get back to $100 per barrel in the not too distant future (due to Americans doing USA-based vacations in their cars and getting back to going out to eat, stores, etc.).
It probably will not be too long before we hear of a blast furnace coming back online at USS, AMUSA or AK Steel (Cleveland-Cliffs) to accommodate automotive. The fear on behalf of steel buyers is the possibility of too much, too fast. We will need to watch the balance between supply and demand.
We are hosting what I think will be a very interesting SMU Community Chat tomorrow (Wednesday, May 20) at 11 AM ET with John Anton of IHS Markit and myself. The webinar is free to anyone who would like to register and join us. The chat will take 40 minutes or less out of your day. To register click here.
On a much different topic, I received a note Monday from a steel buyer who contracted COVID-19 and was just returning to work after being absent for the past six weeks. He asked that I not share his name, but he (and I) feel what he went through is important for everyone to think about as you go to the grocery store, restaurant or sporting event.
COVID-19 A Personal Perspective
“John, I don’t know exactly how I caught this virus, but I spent the last six weeks fighting for tomorrow. I had no energy or appetite and at times I didn’t recognize my wife or daughter. Hell, I wasn’t scared because I just didn’t understand.
“I have a strong wife and daughter who just pushed me through this ordeal. I am 40 pounds lighter, but not a good diet plan. I’ll take being pudgy.
“This Covid-19 is real, and we need to prepare for a different tomorrow. Wear your mask for your protection as much as for the others around you.”
I think I will end here…
As always, your business (and your lives) are truly appreciated by all of us at Steel Market Update.
John Packard, President & CEO
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John Packard
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Final thoughts
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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Final thoughts
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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Final thoughts
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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Final thoughts
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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Final thoughts
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.