Final Thoughts

Final Thoughts
Written by John Packard
May 13, 2021
Honest answer: I don’t know…
One of the questions asked in last week’s flat rolled and plate steel market trends analysis has been repeated many times over the past five months. The phrasing of the question changes as steel prices continue to rise and surprise those taking our steel market survey. We asked last week, “Hot rolled coil prices average $1,500 per ton. Where do you think HRC prices will peak?” Here is a breakdown of the data collected:
The numbers continue to move higher each time we conduct this survey. As you can see, only 1% of the respondents reported prices as having already peaked, while 92% are now of the belief prices will reach $1,600 per ton or higher.
Here are a few of the comments left behind with this question:
“The mills appear to be now raising prices weekly, and with no notice either.” Manufacturing company
“I think it is a lock that we hit $1,600/ton. And so far everytime I’ve [made a prediction], it has only gone higher; $1,700/ton is very doable at this stage.” Service center
“Throw the dart? I really have no idea how high this can go.” Trading company
“Who knows. This is a futile exercise because we have no idea where it is going to peak.” Service center
When the same data providers were asked what month they think prices would finally hit their peak, there was no clear-cut consensus. We found 19% believing June would be the peak, 23% July, 19% August, 17% September and 18% October of later.
When asked if steel prices were nearing a tipping point, we found an evenly split group of respondents as 49% said they believe prices are at a tipping point, while 51% said we are not there yet. They left a few interesting comments here as well:
“They have to be. We have noticed in the last week a gradual downturn in our roll forming footages, which is a welcomed sign at this point.” Manufacturing company
“Yes, I think by the end of June we will start seeing some holes on light gauge acrylic Galvalume first, then continue to migrate to HRC.” Service center
“By end July we will begin to see some supply relief thanks to the new capacity, ie Ternium and perhaps SDI in August?” Steel mill
“We’re always waiting and listening for the music to stop. And we are still hearing it blaring. Maybe the volume is dying a little, but it isn’t stopping yet – that is for sure.” Service center
The SMU Price Momentum Indicator continues to point toward higher flat rolled and plate steel prices over the next 30 days.
Steel Market Update Events
Here are the upcoming SMU steel training workshops:
To learn more about each workshop, our instructors, agenda and the cost to attend as well as how to register, please click here.
We’ve gotten good news on the mask mandates for those who have been fully vaccinated. SMU continues to encourage everyone to get their shot(s) if you plan on attending the 2021 SMU Steel Summit Conference in Atlanta on Aug. 23-25. The agenda and speakers are filling in nicely; you can view the agenda by clicking here. You can learn more about costs to attend and how to register by clicking here.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO, John@SteelMarketUpdate.com

John Packard
Read more from John PackardLatest in Final Thoughts

Final Thoughts
United Airlines raised eyebrows earlier this month when it provided two forecasts for 2025 – one assuming a relatively stable economy and another assuming a recession. The reason? Uncertainty around the impact of President Trump’s policy shocks on the broader economy. And it sometimes feels like we’re seeing a battle between those two narratives (stable vs recession) play out within in the pages of this newsletter.

Final Thoughts
Despite some scary headlines lately (especially about Trump potentially firing Fed Chair Jerome Powell) this is not October 2008 (financial crisis) or March 2020 (onset of the pandemic). But it sure seems like we’ve taken a relatively strong economy and poured a thick sauce of uncertainty over it.

Final Thoughts
I put some of our survey data through ChatGpt, with interesting results.

Final Thoughts
Nearly 50% of respondents to our latest survey thought hot-rolled coil prices have already peaked. And where will those prices be two months from now? Responses were decidedly split on that question.

Final Thoughts
A modest week-to-week change in HR price understates a huge swing in expectations.