Final Thoughts
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/fba894d95cba97e3f55978b87a29566e.jpg)
Final Thoughts
Written by Tim Triplett
September 2, 2020
The benchmark hot rolled steel price has jumped back over the psychological line of $500 per ton, to $515 by SMU’s current estimate, which is a positive sign for steel demand, but it begs the question: How high will it go and for how long?
SMU asked steel buyers how much of the $40-60 per ton in price increases announced last week they expect the mills to collect. Roughly one-third said, “all of it,” while the remaining two-thirds said, “some of it.”
Some buyers’ comments:
“There are so many issues right now and planned outages on the horizon that should allow them to grab it all.”
“It might take a second increase to get the full amount, but limited options will allow the mills to have their say.”
“Inventories are low and lead times are stretching. They will collect for a short period of time.”
“They’ll collect in September and October, then give it back in December.”
“Of course, there will be very little ‘spot’ business. Mills will be shipping a significant portion of their September production at much lower CRU minus and/or previously booked, deeply discounted numbers. The gap between spot and CRU minus contract pricing will be over $100 per ton.”
SMU also asked: Where do you expect hot rolled steel prices to be by the end of September? About one-third put the price in the $450-500 range, which would be down from the current price, suggesting the upturn may be short-lived. The largest group, more than 60 percent, forecast the number at month’s end in the $500-550 range, only modestly higher than today. Only a small percentage of optimists predicted the HR price could climb over $550 in the next few weeks.
SMU’s Steel Buyers Sentiment Index has jumped by 27 points in the past month to a reading of +61, which is even better than at this time last year when the pandemic was not an issue. It’s worth noting that the results may have been influenced to some degree by last week’s SMU Virtual Steel Summit. Summit attendees who filled out this week’s market trends questionnaire may be feeling a bit more optimistic than others. Analysis presented by the experts at the summit was certainly not all good news, but on balance presented a hopeful outlook for the coming year.
It’s difficult to assess how President Trump’s decision to amend the quota on imports of semifinished steel from Brazil for the rest of the year will impact the market. The administration contends the change was necessary “in light of recent deterioration in market conditions brought on by the COVID-19 pandemic affecting domestic steel producers.” But, certainly, restricting imports of slabs and billets to 60,000 tons, down from 350,000 tons, stands to hurt the companies that are dependent on them. Taking 290,000 tons out of the flat rolled supply chain at a time when several mills have planned fourth-quarter outages and demand is on the upswing could end up hurting other people as well.
As always, your business is truly appreciated by all of us here at Steel Market Update.
Tim Triplett, Executive Editor
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/04/tim-triplett.jpeg)
Tim Triplett
Read more from Tim TriplettLatest in Final Thoughts
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/gears.png)
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.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/gears.png)
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.)
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/11/SMU-Steel-Summit.png)
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.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/11/SMU-Steel-Summit.png)
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.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/11/SMU-Steel-Summit.png)
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.