Final Thoughts

Steel Market Update (SMU) ferrous scrap sources are advising us that the scrap market pricing have not settled yet. It seems that every periodical wants to fan the flames of scrap price collapsing (and we do our share as well I suppose) before the final numbers are locked in. Keep that in mind when evaluating where you think steel prices will go from here.

Something to think about: we know that there is a correlation between shredded scrap and WTI (oil) pricing. We pointed out a disconnect between WTI and shredded scrap pricing in our final thoughts about a week ago. It appears that the disconnect may be coming back into line as oil prices have bounced off $43 per barrel and were close to $52 per barrel today. As we have mentioned in our scrap article, the expectation is shredded scrap will drop by a minimum of $50 and could go down by $70 or more.

As I moved around talking to various steel people today I learned that hot rolled coil is being offered by multiple suppliers at $460 per ton ($23.00/cwt) CIF, Duty Paid, Gulf ports.

It is time to begin a dialogue as to whether we are closing in on a bottom to the slide in flat rolled prices. I will discuss this subject in greater detail once I get a chance to evaluate the results of the survey we are working on right now. Premium level members will get access to our Power Point by Friday afternoon of this week.

I expect some of our readers may want to weigh in on the debate. Please feel free to contribute. You can send any comments to me directly at: John@SteelMarketUpdate.com.

As always your business is truly appreciated by all of us here at Steel Market Update.

John Packard, Publisher