SMU Week in Review: April 21-25

This week saw quarterly results from Steel Dynamics, AZZ Inc., Reliance, and GrafTech.

Of course, one thread through all these calls was the impact of tariffs, with some companies saying the import taxes are causing too much uncertainty, and others, like SDI’s chief exec Mark Millett, saying Trump’s tariffs – as well as the results from the recent CORE case – will benefit the Fort Wayne, Ind.-based steel and aluminum company.

In fact, Millett went even further when forecasting the durability of the tariffs in general: “I don’t believe that the current tariff regimen is going to be in place much longer than through this year.”

Meanwhile, pig iron markets are seeking clarity through the tariff fog – mainly, trying to answer the question of which party will have to pay the levy. SMU’s Stephen Miller has some insight into that, based on some recent cargo sold to a US buyer. Also, could there be a shortage of pig iron as scrap markets are under significant pressure? Some Brazilian sources are indicating that could be the case.

Speaking of scrap, the domestic ferrous market is looking soft for May, due to a combination of lackluster steel sales, warmer weather, tariffs, and general economic malaise. Much of the scrap being brought to recyclers seems to be obsolete “peddler scrap” and car bodies along with demolition. It is unclear how much prime scrap will be generated, but the presumption is less than in March.

With a rush to buy early in the year to get ahead of tariffs, the galvanized market saw strong demand in the first quarter. Still, participants on the monthly Sheet Metal/Air Handling Council call said there is uncertainty about what the rest of the year will bring. And one buyer raised questions about a disconnect he sees between the galvanized and hot-rolled futures market. You can find out more about what members of the Heating, Air-Conditioning & Refrigeration Distributors International (HARDI) had to say here.

Greg Wittbecker examined the US’ trade war with China, noting container shipping lines have sharply increased blank sailings on transpacific routes in response to escalating trade tensions. Blank sailings are canceled voyages. Find out more about what that could mean for aluminum.

Let’s check out prices. Nucor said it kept its weekly hot-rolled coil price flat after a marginal cut the previous week. As of April 21, the CSP was $930 per short ton, unchanged week over week and down just $5/st over the past month.

SMU flat-rolled steel prices were flat or lower as tariff-related uncertainty continued to drag on the market. SMU has also adjusted all its sheet price momentum indicators from neutral to lower. You can dig into the details and indices here.

Looking at US hot-rolled coil vs offshore markets, domestic HR coil prices were flat this week after dropping for four straight weeks. Most foreign markets bucked the trend and gained ground. Tariff fears have slowed the US market. Stateside prices have slipped in response, and spot buyers stepped back. And little change was seen even after the 90-day pause on harsher “reciprocal” tariffs was announced in early April.

What’s coming up, April 28-May 2

More earnings. Some notable ones are Nucor (April 29), SSAB (April 29), ArcelorMittal (April 30). U.S. Steel will release Q1’25 earnings May 1, after markets close. Due to the company’s pending-but-stalled deal with Nippon Steel, the Pittsburgh steelmaker is not holdings an earnings call.

Economic reports:

April 29: Consumer confidence

April 30: Chicago Business Barometer (PMI)

May 1: Initial jobless claims, ISM manufacturing, construction spending, auto sales

May 2: Unemployment rate