Final Thoughts

As I mentioned above, our analysis of plate inventories along with channel checks with plate-focused service centers suggests there will be further strengthening on spot plate prices through the balance of Q3 and probably into Q4.

Quotable Quotes from This Week’s Channel Checks

Every week we go out to manufacturing companies, service centers and some of the steel mills to get a sense of where spot steel prices are (HR, CR, GI, AZ and plate) and what steel buyers are seeing/sensing/opinions about steel prices, their business demand and the market in general. Here are some of the quotable quotes we received this week:

From a manufacturing company, “We were told they [steel mills] are probably going up in September to close to $1,900 [per ton for hot rolled coil].” 

From a service center executive when asked: Are you seeing any easing of spot pricing? “No, but it’s getting close as import offers are becoming more interesting…price gap’s widening enough to get interesting.”

Another service center executive responded to our inquiry about when steel prices would peak with, “As an admitted bull, I initially was a believer in $2,000/ton at some point in Q4 2021 before the holidays start in earnest, but with SDI’s issues (unplanned at Columbus, delays at Sinton) and Cleveland-Cliffs’ continued discipline (scheduled outage at Indian Harbor – No. 7), I am starting to think we won’t see a real peak until maybe even Q1 2022. Just saying that is ridiculous. Wow.” That same service center told us they have no intention of getting burned with too much inventory, which is what happened to them in 2009 and again in 2019.

I know it’s hard to believe, but the SMU Price Momentum Indicator for all flat rolled and plate steel products is pointing toward higher prices over the next 30 days. Did you ever think the domestic steel mills could move prices in one direction (other than down) for an entire year? Well, they are only days away from accomplishing just that….

It’s Time to Change the Channel

I added a number of speakers this week for SMU’s Steel Summit next month including Cesar Jimenez, CEO of Ternium Mexico, and Jeffrey Short, Vice President of the American Transportation Research Institute. Mr. Jimenez will speak one-on-one with either myself or Michael Cowden about the just completed 4.5 million metric ton expansion of Ternium Mexico, which included a new hot strip mill, coating facilities and more. Mr. Short will add another strong voice to the transportation panel we are putting together to discuss the issues within the trucking industry and its impact on the movement of steel.

I spoke earlier today with Michael Smerconish of CNN/Sirius XM Radio/Author about his participation in our conference. Mr. Smerconish will kick off the conference this year on Monday afternoon with a keynote speech entitled, “It’s time to change the channel.” In his talk, Smerconish discusses his experiences (and the experiences of the country) over the past 30 years and how we got to the point we are today. Smerconish is an engaging orator and I think he will provide an excellent 30,000 foot view of the U.S. political system, media involvement in it, and what can be done to improve the country as we look toward the future. You do not want to miss his keynote presentation.

ITR Economics’ Forecast for Great Depression in 2030s

I saw a note today from ITR Economics stating that their call for a Great Depression in the 2030s is still in place. They said in a note to their clients, “The causal factors pertaining to that outlook have increased, not decreased, as a result of the pandemic.” I am sure Alan Beaulieu of ITR Economics will discuss with our SMU Steel Summit attendees not only what companies need to be doing over the near term (next year or two), but what they (and individuals) need to be doing to recognize the signs as to when to prepare for the Great Depression. In their note, ITR said, “There will be many opportunities and changes presenting themselves between now and the major cyclical downtown.” You will want to attend Dr. Beaulieu’s keynote presentation at this year’s conference, which runs from 9 a.m. on Aug. 23 until 3 p.m. on Aug. 25. ITR Economics’ presentation is on Tuesday, Aug. 24.

SMU Steel Summit Conference Update

There is now about 37 days (5 weeks plus a couple of days) until the beginning of our conference, which will be held live in Atlanta at the Georgia International Convention Center. You still have time to get vaccinated against COVID-19.

We have smashed through 800+ registered executives for the 2021 SMU Steel Summit Conference. We are now on pace to exceed our 900+ registered attendee goal. We could well hit 1,000+ based on our current booking rate. Over the past two days we have registered the following companies (those with an * means there is more than one person registered from that company): BMW Manufacturing Co., LLC; James Burg Trucking Company; JFE Steel America, Inc.*; Lousteel LLC; Minnesota Power; North Shore Steel; Pacific Metals Trading, Inc.*; SPS Companies, Inc.; Stemcor USA, Inc.*; The Greenbrier Companies; and Welded Tube of Canada Corp. The following companies added more executives to their registration: Kloeckner Metals*; NIM Group*; Nippon Steel Trading Americas, Inc.*; and Nucor Steel*. You can view the full list of attending companies by clicking here.

To register for the 2021 SMU Steel Summit Conference, please click here. You can learn more about the conference agenda, speakers, NexGen Leadership Award, costs (both live and virtual) to attend, and how to register by clicking here. Please note that we have a virtual option for those of you who are unable to attend our live event.

All of the Gateway Hotels (those located next to the Georgia International Convention Center) are sold out. I would recommend two hotels on Best Street, which are the Airport Marriott Hotel and the Westin. If you receive solicitation from a group representing themselves as our hotel booking agency, it is a SCAM. Also, I noticed the hotels being recommended are nowhere near the GICC. There are rooms in the hotels I mentioned. Also, I would recommend checking the websites or calling the Gateway Hotels as they will occasionally get cancellations. Those hotels are the Airport Marriott Gateway, SpringHill Suites Gateway, AC Hotel and Atlanta Airport Gateway Renaissance. All of the Gateway properties are owned by Marriott.

BTW – We have one or two sponsor slots left and a couple of exhibition areas. If your company has an interest in being a sponsor or exhibitor at this year’s conference, please contact Jill@SteelMarketUpdate.com

NexGen Leadership Award Deadline is Friday, July 16

2021 is the third year for the SMU NexGen Leadership Award which is sponsored by the Steel Manufacturers Association.

We enjoy honoring young people within the greater steel industry who have shown themselves to be creative, innovative leaders within their organizations, problem-solvers, and up-and-comers. They can be young executives (35 years of age or younger) or they could be someone who is on the shop floor. Whatever their function, they are a net positive influence on your company and your people.

We have some great nominations already, but I would like to see more. Please take a moment to reflect on the people within your company to see if there is someone who has earned the opportunity to be recognized by SMU and the greater steel community for their contributions to the industry.

You learn more about the nomination process (self-nominations are accepted), what nominees and the ultimate winner receive for recognition, what a good nomination looks like, our past winners, and what you need to do to make a nomination by clicking here or going to this website: https://events.crugroup.com/smusteelsummit/awards

Nominations close at 5 p.m. ET on Friday, July 16. If you have any questions, feel free to reach out to us at conferences@crugroup.com or to me directly at John@SteelMarketUpdate.com Don’t miss this opportunity to tell your young people that you care.

Bernard Swiecki Next Community Chat Speaker

One of our guest panelists at the 2021 SMU Steel Summit Conference will be our guest speaker during our July 28 SMU Community Chat Webinar. These webinars are free to all SMU members, their teammates, and anyone involved with the steel industry. Swiecki is a well-known automotive expert and his comments about where he sees the industry going will be quite interesting both during our Community Chat as well as during our conference. You can register for the webinar by clicking here.

Next Steel Hedging Price Risk Workshop

Steel Hedging 201: Advanced Strategies & Execution Workshop will be held virtually on Aug. 3-4. This is an excellent workshop for those who are just beginning to trade steel futures, or whose companies are interested in figuring out how they are going to protect themselves from rapidly rising or falling steel prices. Spencer Johnson of StoneX is our exceptional instructor. You can learn more about the program, speakers, 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