Big calls for 2025

Before we get into the report, I wanted to take the time to thank all our customers, suppliers and transport partners for 2024. It has been a challenging year for the markets we service however we are proud to be part of your supply chain programs. As we look toward 2025, I hope we can all take some time this holiday season to take a break, relax and enjoy time with our friends and family next to a warm fire.

Ok back to steel! Last report of the year! Lets get it!

Demand

We expect demand to be flat to lower moving into 2025 based on customer activity and bookings we received in 24Q4 for a late 25Q1 release.

Distribution has been echoing a “dog fight” for 2025, we agree with their analysis as we fight daily with our competitors to win business.

Infrastructure and mining demand is typically decided late December and in early January for long multi-year price contracts. Once awarded we expect their to be reservations made on steel that is already on the ground.

Buckle up my friends.

Supply

Google “Steel Plant Closing News” and you will see what the current production is being forced to do facing weakened demand in North America. In the next two quarters this will affect domestic lead times. Lowered capacity also ties into the tariff discussion late on in this report.

Globally source steel products, depending on the grade and material are ready to ship in Jan and Feb. Although looking for orders, steel mills from overseas are at a floor price and there doesn’t seem to be room for price negotiations.

Containers are available, and pricing inches downward.

Policy

President Donald Trump has announced that on day 1 of his presidency he will implement 25% tariff on all goods coming from Canada and Mexico and a further 10% on all goods coming from China. I believe he will create an executive order to do the above. When this happens, Canada will be forced to do the same against the United States, but ALSO on all imports coming into Canada.

I also believe the Canadian dollar will continue to weaken as the DJI becomes more and more volatile. I expect the Loonie to over 1.50 within 60 days. I believe Canadian mills will be able to continue to sell into the USA with a 25% Tariff due to the weakened Loonie and their pricing will be forced to go up to all Canadian customers. US mills will roll and sell to US customers as they always had, without interference from Canada or Mexico, who are (excuse my French) a pain in the butt to the North Eastern mills and the Southern mills (where most if not all US steel manufacturing is located).

Hopefully smart distributors can seize the moment and hold or increase pricing to end users in all markets, allowing for stocks to sell and inventories replenishment to be triggered.

Raw Material

HRC continues to move sideways. Iron ore, scrap and coking coal continue to trend sideways if not at 20-year lows.

Keep an eye on increased activity in the middle east - increased global conflict increases may also impact supply and availability of said raw materials.

Freight

Freight rates continue to move slowly downward on certain routes.

Charts

Iron Ore: Historic Chart

Dow Jones Industrial Index, moving downward after a bull market in 2024.

Baltic Dry Index: Showing freight rates leaking, low levels. Impacted by more geopolitics in the Middle East.