Final Thoughts

With the announcement of a flat rolled price increase out of USS/POSCO, the table is now set for California Steel on the West Coast (which SMU’s Steel 101 workshop will be visiting on Thursday of this week), as well as the East Coast and Canadian steel mills, to make announcements of their own. Benchmark hot rolled price offers out of the Eastern mills were said to be in the $600-$610 range. A $50 per ton move would put the offers somewhere around $650 per ton (+/- $30 per ton). The market peaked earlier this year at a $655 per ton average, according to our own index.

The steel industry has been assuming the Section 232 investigation on steel is going to be a “slam dunk” for the mills. Don’t count your chickens until the fat lady sings. First, we need to see the recommendations from Commerce which won’t happen until Congress is briefed (and the briefing keeps getting pushed out due to push back from Treasury, Defense and others). If the recommendation is “radical” there will be all kinds of manufacturing feedback to the White House which could delay or change President Trump’s final announcement of remedies. Then, as trade attorney Lewis Leibowitz explained to SMU late last week, the fun starts. The fun will be all of the maneuvering by the legal community to block implementation (similar to the President’s travel ban).