Final Thoughts: China is the Donald Trump of the Steel Industry & More...

This evening I was talking with a large steel buyer about the fundamentals of the steel market and how long can prices continue to go higher. I told him that I had spoken with another large steel buyer earlier today who told me they could not understand how the fundamentals have changed in China. They still have hundreds of millions of tons of excess capacity and still prices have surged over the past eight weeks in China. He told me that the Chinese mills have lost billions of dollars this past year and the banks are now calling the shots. The losses were too great. The mills had to change their stripes and now become profit generating centers. It dawned on me in a bolt of mental clarity: China is the Donald Trump of the steel industry…

Everything and everyone seems to be rushed right now. Buyers are scrambling to get orders in, mills are looking for the right time to open order books, foreign offers are few and far between and everyone is trying to make sense of all of this. Feels just like 2004 when I started writing Steel Market Update for my then steel buying customers. The one problem with being rushed is people make mistakes. For some reason I have been struggling to get my numbers right with AK Steel. I sent out another almost correct article in our last newsletter and I am sure a number of you caught my boo-boo. Cold rolled at a minimum of $680 per ton is $34.00/cwt (not $32.00/cwt) and galvanized base price minimums out of AK Steel is $690 per ton which is $34.50/cwt.