Final Thoughts

August 28, 2022

There have been a couple of attempts to move steel prices higher over the past couple of weeks. At the same time, there have been some very large orders taken well below current levels as published by SMU and our CRU parent. The question is are they repeatable?

During a conversation on the sidelines of the SMU Steel Summit Conference last week, one large service center buyer told me they would be pulling back on their buying because they are aware of the large block purchases made by a competitor that will most likely impact their sales.

The challenge when evaluating steel prices in a market like this is separating reality from “noise” created by mill price increase announcements. SMU will continue to collect price data and will react to what we find in not only our price range and average, but also through our Price Momentum Indicator. Stay tuned.

As Alan Beaulieu of ITR Economics left the stage at the 2022 SMU Steel Summit Conference I asked him if he thought China would attack Taiwan – this has been a topic he has discussed at length in past conferences. He believed that a Chinese attack on Taiwan would only occur to smother discord among its citizens – only if the Chinese government or economy were facing mounting internal pressure. In past conferences, he spoke of unbridled nationalism as a way to keep the Chinese population in check (and not overthrow the government).

Alan told me that if China was going to attack Taiwan to inflict as much pain as possible on the US it needed to be done within the next two years. Why two years? Otherwise, the US would no longer be reliant on Taiwan for microchips for use in automobiles, computers, planes, and probably most importantly for weapon systems.

And Time Goes On…

Out of curiosity, I calculated the number of articles I have written since I first started writing Steel Market Update in 2004. By my calculations, I have written over 28,000 articles. Then I started to think about how many typed pages may have been involved since the beginning. To figure that out, I went back to some of the early issues which ran 3-5 pages each. As the years progressed, the issues became longer and more detailed. Over the past few years, I have been able to rely on Brett, Tim, David, and Michael to take up some of the slack and my production was less. Even so, I used five full type-written pages as the average. Over 18 years, with an average of three issues per week, times 52 weeks equaled 14,040 typewritten pages. If a typical book is 300 pages, then I have written the equivalent of 47 books over the 18 years… Yikes!

Now I am down to my last three Final Thoughts articles…

Some of you may be wondering why we end the newsletter with our “Final Thoughts” as opposed to something else. When I started the newsletter, I wanted a place to provide my opinions on a wide range of topics. It was understood that I was allowed some leeway to speak about the market from my perspective, or to put items into some form of context that I thought would help our readers.

Many of the attendees at this year’s conference wrote in my retirement book or stopped me as I wandered the floor to thank me for starting Steel Market Update. The newsletter has touched the industry in many ways. It has been a vehicle for more transparency within the industry. It has been a place where the industry could comment, question their suppliers, or examine what was being imposed on them by the government.

SMU always tried to represent both sides, and then let buyers and sellers of steel make their final decisions.

SMU came up with new ways of measuring prices, demand, inventories, and the sentiment of the greater steel community. I think you will see this continue under the leadership of Michael Cowden and the SMU team.

It has been a pleasure to build an organization that is (1) respected within the industry, (2) has developed products needed by the industry, and (3) has employed wonderful people.

Due to my background both through my education and my experience in the steel industry, education was an important component of the newsletter. Second, as I aged and those within the industry grew older with me, it became important to encourage and recognize younger folks to get involved and stay in the industry.

This year, Steel Market Update awarded our fourth SMU NexGen Leadership Award to Austin Reynolds of Ace Steel Supply. We had an exceptional group of nominees this year.

This was also the first year for the new NEXGEN Metals Community. The NEXGEN Metals Community is for those of you who are 40 years of age or younger and who would like to network, learn, and be inspired by others in your age group. This is a free organization and I highly encourage young folks within the industry to join. You can find more information about the group here: https://www.steelmarketupdate.com/nexgen/

FT NexGen Photo2.2