Final Thoughts
Final Thoughts
Written by John Packard
September 23, 2020
There is a lot of catching up that I have had to do over the past few days. In the process I have spoken to steel buyers and sellers, mills, service centers, and traders.
Steel buyers should anticipate another flat rolled price increase between now and early October. Scrap is rumored to be going up again in October and the mills will use the increase (or projected increase) along with the tightening of supply to move prices higher.
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
John Packard
Read more from John PackardLatest in Final Thoughts
Final Thoughts
t this point in the game I think what we can say about Nippon Steel’s proposed buy of Pittsburgh-based U.S. Steel is that it will go through, it won’t go through, or the outcome will be something new and completely unexpected. Then again, I’m probably still missing a few options.
Final Thoughts
President-elect Donald Trump continues to send shockwaves through the political establishment (again). And steel markets and ferrous scrap markets continue to be, well, anything but shocking. As the French writer Jean-Baptiste Alphonse Karr wrote in 1849, "The more things change, the more they stay the same." (I thought the quote might have been Yankees catcher Yogi Berra in 1949. Google taught me something new today.)
Final Thoughts
President-elect Donald Trump will officially retake the White House on Jan. 20. I’ve been getting questions about how his administration’s policies might reshape the steel industry and domestic manufacturing. I covered the tumult and norm busting of Trump's first term: Section 232, Section 301, USMCA - and that's just on the trade policy side of things. It's safe to say that we'll have no shortage of news in 2025 when it comes to trade and tariffs.
Final Thoughts
Another presidential election cycle has come to an end. If you’re anything like me, part of you is just happy you no longer need to unsubscribe or “text STOP to opt-out” from the onslaught of political text messages this cycle produced.
Final Thoughts
With the US presidential election decided, ‘wait and see’ has quickly turned into ‘we’re about to find out.’ Following Donald Trump’s victory, I had a chance to sit down with Kevin Dempsey, president and CEO of the American Iron and Steel Institute (AISI). He gave his thoughts on what he thought we might see in Trump’s second term in office, and what it means for steel.