Steel Products Prices North America
April 25, 2016
Letter to Editor: Volatility & The Lag Effect
Written by John Packard
Steel Market Update received the following email from a large service center in the United States. This executive, who wished to remain anonymous, enjoyed the article we produced in Sunday evening’s edition of our newsletter entitled, “2016 To be a Year of Volatility?” This executive discussed the issue of supply and the possible reversal of steel prices (and the lag effect that will be connected to the reversal). Here is what this executive had to say:
Hey, nice piece on Volatility last night. You are right thinking about how many (most?) buyers struggle with a suddenly restricted supply. It is hard to pay up in that circumstance, so there is more intense shopping. Which may overstate the heat of the marketplace for producers, and add to supply side effect. Mills are doing a great job controlling their order books thereby staying short and more able to ride the weekly increases in prices (this is especially true with SDI, Nucor, and North Star BlueScope).
