Final Thoughts

On Wednesday of this week I participated in the monthly HARDI conference call (see article in tonight’s newsletter). During the call one of the executives from an east coast HVAC wholesaler told the group that he didn’t believe prices could or would move much higher from here. I disagreed with him. One of the justifications I hear when I speak to executives, who are not in the markets on a daily basis, is weekly production rates are below 70 percent. I have two comments about that, 1) the data is based on no more than 50 percent of the industry actually supplying data and, 2) this is for all products and flat rolled – especially coated flat rolled – are at, or above, 80 percent of capacity. In other words, coated steels are close to full capacity. There is no reason for prices to go down on coated steels, especially when lead times are flipping into Q1 and out of the December doldrums.

It has been my opinion and I want to stress this again, my opinion is bullish on the flat rolled steel industry. I believe prices will move higher and David Feldstein wrote a little about it in our Futures Article tonight but he also wrote about it in The Feldstein which can be found on the Flack Steel website. I suggest you take a few moments and read it.