SMU CEO Talks to Steel Buyers About Steel Market

A steel mill source told me today, “The story of the week is freight. Ocean freight is crazy. Barges disrupted. Railcars don’t exist. Trucks have drivers who don’t wanna drive.”

On the trading side, we are seeing transportation issues, especially for those using containers to move their steel. Getting steel off the ports once it arrives is an issue.

There is nothing easy regarding this market.

We asked if the steel mills are beginning to catch up on their orders during our canvassing of steel buyers this week. Here are a few of the comments we got (plus some extra comments thrown in):

A southern based manufacturing company told us, “All are melting and releasing on time now; only issue is rail and trucks moving the steel. One EAF mill in the South is waiting on over 100 railcars.” This falls in line with the comment made by the steel mill mentioned above.

“Some mills are improving and remarkably (on-time relative to acknowleged date – or, more likely, the ‘re-acknowledged’ date). Others remain a  month late even on the reacknowledged or rescheduled date. In summary, the general health of mills is improving modestly but not substantially,” a source at a Midwest service center said. Regarding getting more contract or spot tons from mills, this same service center also told us, “Yes, but minimal tons and primarily automotive-centric mills. Prices are non-negotiable at the moment. We have passed on some offers at the high end of the range.”

A source at a plate-focused service center told us their orders continue to run at least 2-3 weeks late. When asked if they were seeing any easing of spot pricing, they said, “No, we are being told that current tons allocated have not changed and will not be increasing anytime soon.”

A source at a large manufacturing company told us he didn’t know when prices might change direction. “It depends on planned and unplanned mill outages, import volume, demand and new capacity coming online. In addition, you have government policies impacting steel demand and supply at the global level. I am having a hard time seeing HRC base down to the $800 range at year end.”

Here is an interesting comment from another manufacturing company – a contract buyer – regarding inventory levels and what they anticipate when it comes to future steel prices: “Our production levels continue to be constrained by components other than steel, and we have significantly missed our first half forecast goals for steel usage. I don’t think our service center partner is too upset about that, as they are now selling that excess into the general market at spot prices vs. our contract price. … I believe when our contract adjusts heading into July, that will be our last increase this year. There are enough murmurings around increased spot availability, etc., combined with other commodities retreating from their peak, that I feel steel is soon to follow. And when our contract adjusts again at the end of September, it will be a price decrease.”

Based on the comments we have been getting so far this week, domestic steel mills continue to be late on most orders, although not as bad as it was a month or two back. I have not seen any evidence in the comments we are receiving as to lower steel prices being available now. Many buyers are concerned about whether SDI will have spot tons to offer in August due to the EAF issue at their Columbus, Miss., mill. We are hearing other mills are “no quoting” spot tons due to their order books being full (part of which could be due to maintenance and lead times matching up).

2021 SMU Steel Summit – Excitement is in the Air…

The SMU Steel Summit Conference is now less than two months away. The hotels are filling up. Registrations are moving quite briskly, and there is excitement building toward the first major steel conference to be held in North America since the beginning of the pandemic. The dates for this year’s conference are August 23-25 at the Georgia International Convention Center in Atlanta (right next to ATL airport).

We are well on our way to 900+ attendees at this year’s event. Over the past two days we received registrations from the following companies (the * means more than one person was registered): Argus Media, Bilstein Cold Rolled Steel*, Braner USA*, Central Steel & Wire*, Coilplus, Inc.*, Delta Metals*, Excel Industries, Ferguson HVAC, Ferrous Metal Products, Gerdau Steel*, Kingspan Insulated Panels, Oshkosh Corporation*, OTI, Prime Metal Products, Inc., Quality Edge, Inc., TA Services*, Vesuvius, Wastequip LLC*. We also saw more registrations from these companies: Commercial Metals Company*, Ryerson*.

If you would like to join these and hundreds of other companies, you can register to attend either the live (in-person) or virtual conference by clicking here.

If you would like to learn more about the agenda, speakers, SMU NexGen Leadership Award, list of attending companies, or costs to attend (live or virtually), you can do so by using this link.

A reminder that NexGen Leadership Award nominees get half-priced admission to this year’s SMU Steel Summit Conference. Once the nomination has been made, please contact conferences@crugroup.com to inquire about registering a nominee.

SMU Note: We highly recommend being vaccinated prior to attending our conference. However, we will not be checking for vaccinations at the door. We will honor CDC guidelines and the requirements of the Georgia International Convention Center. (NOTE: If you are traveling from outside the United States, current CDC guidelines call for a negative COVID test no more than 3 days before travel or documentation of COVID recovery within the past 3 months.) We will be supplying color-coded badges or wristbands (or both, not determined yet) so you can identify if you are comfortable being approached or prefer to distance yourself from other attendees. If you have any questions, please submit them to conferences@crugroup.com

SMU Steel Training Workshops: Steel 101 and Steel Hedging 201

We have two workshops on the horizon: Steel 101 and Steel Hedging 201.

Our well-know and well-attended Steel 101: Introduction to Steel Making & Market Fundamentals Workshop will be held virtually on July 20-21. Our Steel 101 workshop covers steel making, rolling, qualities, how steel is bought and sold, and the issues affecting steel prices. Our instructors: Mario Briccetti, Roger Walburn and Chuck McDaniels are experienced steel professionals (two are metallurgists) and instructors. You can learn more about the agenda, our instructor biographies, costs to attend, and how to register by clicking here.

The second workshop coming up on our calendar is our still new (well-received and well-attended) Steel Hedging 201: Advanced Strategies & Execution Workshop. This workshop will be held virtually on August 3-4 with Spencer Johnson of StoneX and guest instructors. This workshop is for those who have some experience with hedging price risk (either from our Steel Hedging 101 course, or from industry experience) and desire a deeper dive into the strategies behind hedging and how to manage the risks associated with your company’s business. You can learn more about the agenda (which is two half days), instructors, costs to attend and how to register by clicking here.

If you would like a free trial to the Steel Market Update newsletter and access to our website please contact Paige@SteelMarketUpdate.com

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

John Packard, President & CEO