Final Thoughts

Canada might be the 51st state. Mexico could be the 52nd state. But all can be resolved if you stop by Mar-a-Lago and kiss the ring?

CRU, our parent company, makes a good case that the tough talk on tariffs might be aimed at giving Trump leverage in negotiations on trade or other issues. Alan Price, an experienced and well-connected trade attorney at Wiley, makes an equally convincing case that the tariffs are not mere bluster – that they’ll be coming, and lightning fast at that, as soon as Inauguration Day on Jan. 20.

And what do I hear from SMU readers more often? Questions about the timeline of the AD/CVD case on coated flat-rolled steel from 10 nations. Because that’s a known thing that will have an impact on the sheet market. (Those timelines are here, by the way. We’ll keep you posted on any updates.)

And then there is the matter of prices. They’re up a little or down a little in any given week. This week is no different. There continues to be speculation that prices will increase in 2025. Exactly when depends on who you ask.

Waiting for what?

It feels like we keep throwing out dates and events. Then we reason that surely after that point on the calendar, the market will awake from its slumber and go soaring upward.

First it was the election. The election came and went. And there was no uncertainty about the result, as some had feared. Even so, there was no Trump bump 2.0.

Now we’re waiting for New Year’s Day to come and go. I suspect after that we’ll be waiting for after Inauguration Day. And, if things don’t improve by then, maybe February – when lead times are solidly into March.

Here’s another thing that hasn’t changed: It’s been a no good, very bad year for scrap. Prices settled down again in December. But maybe January will be better?

The big question remains around demand. Here are a few data points. The Dodge Momentum index, a key advanced indicator of commercial construction demand, fell again in November. And, as I’ve noted before, new vehicle inventories remain high.

Perhaps things will change fast, very fast, after Inauguration Day. In the meantime, it’s a story we’ve gotten used to: so-so demand and increased supply, whether you’re talking hot-rolled coil and plate or coated products. Can a president change that? I’m not sure. We’ll see once President-elect Trump is behind the Resolute desk again – and again with the power to adjust trade flows via a few words on social media.

Maybe when lead times are in March

To be fair, I think there is a pretty good case for pricing improving as lead times stretch into March. Companies that loaded up in October-November (when they thought prices were at a low point) will have to restock eventually. And automotive inventories will presumably right themselves eventually as well.

On the import side, the coated trade case will have more of an impact next year. And so will tariffs. I’ve heard from some of you that while some foreign mills continue to make offers for 2025, others are pulling in their horns until they know where things stand not only with the trade case but also with Trump and tariffs.

We might be seeing a slowdown in imports in the data already. Flat-rolled steel imports were 895,755 short tons (812,615 metric tons) in November, according to government license data. That’s 8% below 974,117 short tons (883,704 metric tons) in October. It’s also down 19% from a 2024 high of 1.11 million short tons (1.01 million metric tons) recorded in May.

A lot will hinge on service center inventories as well. We’ll release updated figures to our premium subscribers on Monday, Dec. 16. (PS – If you’re an executive member, data like this is a good reason to upgrade. Contact SMU salesman Luis Corona at luis.corona@crugroup.com to learn more.)

Tampa Steel Conference

We’ll know the answers to some of these questions about demand, trade, and tariffs when we convene for the Tampa Steel Conference, which SMU hosts along with Port Tampa Bay, on Feb. 2-4.

And we’ll be exploring what they mean for the market with leading executives and experts from across the steel supply chain. Nearly 250 people have already registered for the event. If you haven’t checked out the agenda already, you can find it here.

On the first day of conference programming on Feb. 3, Wolfe Research Managing Director Timna Tanners will delve into the outlook for the steel industry for the balance of 2025.  Institute for Supply Management (ISM) CEO Thomas Derry will discuss the US economy and shifting manufacturing supply chains. And Wiley Partner Timothy Brightbill will guide you through the big changes coming to trade from Trump 2.0.

That should set the stage for some great discussions on Day 2. Sound interesting? Register here!