Final Thoughts

That said, ChatGPT has been available publicly since Nov. 30, 2022. And it informed me that it had access to data dating to September 2021 – so long enough to have observed a few steel market cycles.

Below is a lightly edited transcript of my conversation with the bot. I found it simulataneously more insightful and more cautious than I expected – and also depressingly adept at slinging corporate jargon.

 While it refused to forecast US HRC prices, it did an OKish job at Final Thoughts!

Suggest a name for this steel market cycle.

Steel Wave Cycle

Suggest which part of the “Steel Wave Cycle” we are in.

We are currently in the late stages of the Steel Wave Cycle, which is the consolidation phase. During this phase, the market is consolidating its gains and preparing for the next wave of growth. This is typically characterized by a period of sideways movement in the market, with prices fluctuating within a narrow range.

Suggest a bear case, a base case, and a bull case for US hot-rolled coil prices:

Bear Case: US hot-rolled coil prices could decline due to a decrease in demand from the automotive industry, a decrease in global steel demand, or an increase in global steel supply.

Base Case: US hot-rolled coil prices could remain relatively stable due to steady demand from the construction industry, a balanced global steel market, and a stable US economy.

Bull Case: US hot-rolled coil prices could increase due to an increase in demand from the automotive industry.

Suggest names for each of those market cycles.

Bear Case: Bear Hug, Bear Market, Bear Trap

Base Case: Market Neutral, Market Stable, Market Status Quo

Bull Case: Bull Run, Bull Market, Bull Rush

Those were boring, so I turned up the “temperature” on the bot to get more creative responses. The result: Resurgence Rally, Fusion Flux, Iron Surge, Steel Wave, and Metallurgical Momentum.

Meh… I think the humans do better in that category, so I shifted ChatGPT’s focus to market fundamentals.

Describe the supply-demand balance in steel.

During the pandemic, steel demand experienced a decline as various sectors such as automotive, construction, and manufacturing faced slowdowns and restrictions. This resulted in an oversupply of steel in some regions and a decline in prices. However, as economies began to recover and reopen, steel demand gradually rebounded.

The supply side also faced challenges during this period. Steel producers had to navigate disruptions in production, logistics, and raw material availability due to lockdowns and restrictions. These factors caused intermittent supply disruptions in the steel market.

Suggest the most important factors to watch in the US HRC market now:

1. Supply and Demand: Monitor the balance between supply and demand for HRC in the US. Assess any changes in industrial production, construction activities, and manufacturing output as they directly impact HRC demand.

2. Trade Policies and Tariffs: Stay informed about any updates on trade policies, tariffs, or trade agreements related to steel imports. Policy changes can significantly impact the US HRC market and pricing dynamics.

3. Raw Material Prices: Keep an eye on the prices of essential raw materials used in steel production, such as iron ore and coking coal. Fluctuations in these prices can affect HRC production costs and subsequently impact prices.

4. Infrastructure Investments: Follow government initiatives and infrastructure spending plans, as they can drive HRC demand. Infrastructure projects often require steel, and increased investments can boost demand for HRC.

5. Global Market Dynamics: Pay attention to global steel market trends, including production capacities, exports/imports, and demand from major steel-consuming countries. Global factors can influence the US HRC market, especially given its interconnectedness with the global steel industry.

Where will US HRC prices be in a month?

I apologize, but as an AI language model, I don’t have access to real-time data or the ability to predict short-term fluctuations in market prices. My knowledge cutoff is in September 2021, and I don’t have access to up-to-date information or future market trends.

To obtain the most accurate and up-to-date information on US HRC prices in the near term, it would be advisable to consult current market analysis, industry experts, or financial institutions that specialize in commodity forecasting.

I get it. No forward-looking statements. So I guess AI won’t take the job of our surveys. But maybe you can help me with a deadline today.

Suggest a Final Thoughts column for Steel Market Update

The steel industry has always been subject to volatility, but recent times have presented unique challenges. Fluctuating demand, global trade tensions, and evolving market dynamics have made it imperative for industry participants to adapt and strategize effectively. In this Final Thoughts column, we explore some key strategies that can help steel market participants thrive amidst uncertainty.

1. Embrace Data-Driven Decision Making

2. Cultivate Strong Supply Chain Relationships

3. Diversify Product Offerings

4. Stay Abreast of Regulatory and Trade Developments

5. Embrace Sustainability and Green Initiatives

Conclusion: Thriving in a volatile steel market requires adaptability, strategic thinking, and a focus on long-term sustainability. By leveraging data, fostering strong relationships, diversifying product offerings, staying informed about trade developments, and embracing sustainability, steel market participants can position themselves for success amidst uncertainty. Remember, challenges present opportunities, and by embracing change and taking proactive measures, the steel industry can continue to innovate and flourish in the years ahead.

I didn’t tell ChatGPT my final verdict. Because I didn’t want to hurt its feelings.

But I’ll tell you. That was a pretty boring Final Thoughts. It reads sort of like bad marketing. Grasps the basics. Then dresses up something simple in a ton of jargon and puts a positive spin on it.

Despite all the hype around AI, the experience was not as fun as I’d hoped. Recent revisions to ChatGPT’s algorithms might have made them safer. But they’re also a little too predictable. I was hoping for the crazy ChatGPT I’d read about – the one I thought would predict $2,000 per ton (or $200 per ton) HRC next month! Or that would have taken a conversation about steel, taken it down a rabbit hole, and turned it into a meditation on the meaning of life.

I guess I’ll have to wait for a future iteration. In the meantime, check out chat.openai.com and let me know what you come up with!

By Michael Cowden, michael@steelmarketupdate.com