Final Thoughts

The New Year has started, the pace is a little slow for some, others have told me that their order books got a kick start yesterday. I have to imagine the differences are based on geography and product.

This afternoon I had an interesting conversation with the head of commercial for a domestic steel mill. He told me that at the current price levels the domestic mills would be “foolish” not to compete and take foreign orders. A good example is hot rolled being offered out of Mexico, which is being priced around $720-$740 per ton delivered into USA customers (within reasonable distance/freight rate from the border). Domestic prices are being offered at $700-$760 per ton, FOB the mill. Other than freight and some potential quality concerns, there is very little incentive for the U.S. steel buyer to buy foreign steel.