Final Thoughts
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/5dbd28acbb54461e775253deaa71aed7.jpg)
Final Thoughts
Written by John Packard
April 15, 2021
We understand at least one integrated steelmaker is approaching their spot customers with hot rolled base prices of $1,500 to $1,520 per ton. We are not aware of any buyers at this “suggested” HRC price level (it wasn’t that long ago that $1,300 was the “suggested” steel price).
We concluded one of our SMU Flat Rolled and Plate Steel Market Trends Analyses today. Steel buyers continue to believe we are close to the top when it comes to benchmark HRC pricing. I have been conducting studies of steel buyers for more than four decades and it is rare that the buyers are able to recognize either the top or the bottom of market cycles. You can use your own judgement as you view the latest results from this week’s analysis.
In the latest survey, 39% of the respondents believe HRC prices will peak at $1,400 per ton and 28% think prices will go to $1,425 per ton or higher. We have 33% believing prices have already peaked.
We asked if there are indicators that record-high steel prices might be near a tipping point? About 77% said “no” while 23% said “yes.” Here are a few of the comments left behind from those who believe there are indications we are near a tipping point:
“A bit more steel becoming available from the mill side.” Manufacturing company
“Increases are slowing this week.” Trading company
“Increased import offerings.” Steel mill
“Supply issues with semiconductor shortage could cause automotive to slow down.” Service center
“Maybe. Large amounts of incoming steel from overseas might help drop domestic prices a bit, but that’s a big maybe.” Manufacturing company
From my vantage point, even though we are at historical highs on all flat rolled and plate steel prices, our Price Momentum Indicator continues to point toward new price highs to come. Whether we get to $1,500 or $1,600 or higher, I do not know. Right now, I don’t see a shortening in lead times or more availability from the domestic steel mills; no flood of cheap foreign steel (although there is more foreign steel arriving than we have seen over the past couple of years); no new capacity coming online until later this year; or excessively low inventories.
Regarding inventories, Steel Market Update produced our Service Center Inventories and Shipments Analysis and published it to our data providers and Premium-level members today. The number of days on hand are low, and the long lead times, late deliveries and limited spot tonnage is preventing inventories from rising. If you would like to learn more and see our analysis, you can contact Paige Mayhair at Paige@SteelMarketUpdate.com and she can assist you with what it takes to become a Premium-level subscriber. If you are a service center or wholesaler and you would like to become a confidential data provider, please contact Estelle Tran at Estelle.Tran@crugroup.com
Going back to our survey results from this week, we did not produce a specific article regarding mill negotiations because the information is becoming “static” from survey to survey. The bottom line at this moment is none of the domestic mills are negotiating prices on any flat rolled or plate products.
The other day the topic of the futures markets came up, specifically if prices referenced on the CME HRC Futures market were predictive of what the physical market is going to do. The quick answer to the question is “no.” Do not use the future markets when making purchasing decisions unless you are an active hedger and have formulated a risk strategy (to learn more, sign up for our Steel Hedging 201: Advanced Strategies & Execution Workshop).
Registrations for the 2021 SMU Steel Summit Conference are heading toward 350 executives as we added the following companies over the past few days (those with * means more than one employee will be attending): 3VC Consulting LLC, BlueScope Steel Americas, Capital Hardware Supply, Harris Steel Company*, Material Sciences Corporation*, Phoenix Metals* and Union Corrugating Holdings, Inc. You can join those companies and hundreds of others at what promises to be the largest steel conference with the highest quality program/speakers during this calendar year. Our in-person event is scheduled for Aug. 23 (arrive early or the night before as we start at 9 a.m. ET) through Aug. 25 (make your flight reservations to go home around 5 p.m.). You can learn more about our agenda, speakers, sponsors, costs to attend and how to register by clicking here.
We are filling up the sponsorships for this year’s conference. Right now, we only have a couple of sponsorship spots left. The exhibition booths are also filling up. We have about 10 booth spaces left. If you are interested in becoming a sponsor or exhibitor in Atlanta for the SMU Steel Summit Conference, please contact Jill Waldman at Jill@SteelMarketUpdate.com or by phone at 303-570-6570.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO, John@SteelMarketUpdate.com
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/04/john-packard.png)
John Packard
Read more from John PackardLatest 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.