-“It’s not just you” the rest of the world seems to be saying to the North American steel market.   Pricing around the world is well below $600/ short ton but we remain at or above those figures.  Even at or just below $600, there is money to be made for the low cost producers as the story has been dramatically decreasing raw material costs for the EAF mills.  We keep hearing about rumblings of prices increases, but it’s hard to justify with the bottom falling out of the raw materials in a well supplied market.   We approximate that the cost to produce an EAF band will be around $530 over the next several weeks to a month and this could easily go to $500.  This opens up a profit opportunity for the EAFs.  Costs to make steel around the world are resetting.  

-Until a recovery in rebar prices and construction prices in China and the Middle East, it will be hard for scrap to rally.  

-All eyes are on China and the ECB for direction – a fact underscored by a mini rally in iron ore last week apparently based solely on expected stimulus by the central government.  Mixed reviews on China’s easing last week – possibly it is an indication of a weaker than disclosed economy.   ECB backed up Spain’s banking system with $125 billion over the weekend.  

-Hot rolled futures, though down in recent weeks, do not yet reflect doom and gloom being bandied about in market conversations.

-As we head into summer, demand is clearly off and inventories have risen- both of which were bright spots for steel pricing.  The price will go up – but off of what number?