Final Thoughts

Steel buyers continue to be cautious as one Midwest service center executive put it to me, “While we see continued near-term momentum, there is the risk of course that the market corrects, as these maintenance outages are completed.  There is more capacity coming online next year too.  It is also possible buyers look to imports now – for 2Q needs; and if so, these buyers will need less domestic steel in coming months.  Obviously, another wave of COVID is a major risk as well.”

Regarding COVID and a possible second wave: I spoke to our London offices yesterday who advised England has imposed a second lockdown and all workers who are able to work from home have been ordered to do so, restrictions on gatherings, restrictions at pubs, a halt to spectators at sporting events, a $250 fine for not wearing a mask in public (even first time offenders), those failing to “self-isolate” face fines of $12,500. The changes do not go back to full lockdown status as was seen in March (schools/universities remain open) but the new rules are expected to remain in place for the next six months. England had more than 41,000 new COVID cases earlier this week and are projected to reach 50,000 new cases per day by October.

From Big River Steel spokesperson, I learned the galvanized line will resume production this weekend. The company told me, “Big River Steel is currently finishing the refractory dry out and will then recharge the pot with zinc in a day or two. Galvanized shipments are expected to resume over the weekend.” The lack of production off the GI line at BRS has been one of the major problems within the market. We heard from one service center, “The Big River Steel Galvanized line being out has rocked my world.   Galvanized is near impossible to get until December and at a high price.  The other mills jumped at the chance to push prices up.  I was surprised to see in the newsletter [SMU] this morning that your average price is below $40.   I can’t get anyone to quote below $40. I’ve been told there will be no year-end deals this year – so I’m looking at more contract business.  However, with prices where they are now, I’m not sure about locking in. What to do?”

SMU is taking our Steel 101: Introduction to Steel Making & Market Fundamentals Workshop virtual. We are working with the dates of October 20-21 for the first virtual Steel 101 event. You will be seeing more information on this workshop and registration links in the coming days. If you have questions please send them to: Jill@SteelMarketUpdate.com

It’s good to be back, and to know that the steel market still needs old guys like me to help make sense to what sometimes can seem like total chaos.

If you are new to SMU and are not yet a subscriber, please consider joining. I spoke with a service center buyer yesterday who told me that the information in SMU is more important today than it has ever been. You can learn more about becoming a member (as we like to call our subscribers) by contacting Paige Mayhair at Paige@SteelMarketUpdate.com

My name is John Packard and I like to hear from our readers, and from those associated with the steel industry. You can reach me at John@SteelMarketUpdate.com

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

John Packard, President & CEO