Pricing

Steel prices continue to rise through into early and now late May. With a weak supply of coil and an increased cost in scrap and trucking, it is causing a real disruption in both pricing and lead times. As of May 19th,2021, the steel pricing index known at the CRU has now increased 40 weeks in a row. The CRU index has now seen an 102% increase in the steel index since the first week of December and a 155% increase since the first week of October 2020. This marks the 10^th month in a row that the CRU index has increased. Nucor Tubular and Atlas Tube have once again raised prices on HSS, pipe, mechanical, and piling products by another $125/ton in mid-May. All other structural tubing mills have followed suit. This kicks off the 14th round of price increases since August. With regards to DOM, most mill pricing has increased 10 times for a total of 67-70% overall since the beginning of October 2020. The below charts reflect a current listing of all price increases on tubing that we have seen since late August of 2020. 

Hot-rolled coil steel prices continue to rise, with prices again hitting an all-time high this week, exceeding $1,541/ton. Nucor announced it increased its base price for carbon steel plate by $80/ton to $1,220/ton, effective immediately. Fastmarkets’ assessment for steel cut-to-length plate prices is $1,190/ton currently.  (Source: AMM)  

Pricing on all cast iron products is gradually increasing. This can be attributed to higher raw material surcharges and an increased cost of freight. Base prices increased in February but have remained stable since.  We have heard rumblings that there could be a significant increase in base prices in July.  The below chart details the Dura-Bar surcharges over the last year or so.

Lead Times

Understanding lead times for steel products are important to every participant in the supply chain. Lead times for steel products are as follows (as of 5/01/21):

HRC lead times decreased slightly this week to 8.8 weeks versus an average of ~5.4 weeks since 2016.  Other product lead times increased slightly this week with CRC lead times at 10.0 weeks, HDG lead times at 11.4 weeks, and plate lead times at 8.9 weeks.  (Source: Platts)

DOM Tubing is anywhere from 20-34 weeks given the availability of raw steel coils.

Structural Tubing mill lead times are running approximately 12-14 weeks upon receipt of order.

Dura-Bar Continuous Cast Iron mill lead times are approximately 2-5 weeks depending on size and grade.

Metal Production

In the week ended April 24, US raw steel production increased 0.6% week-over-week to 1.78mt (+43.6% YoY). US capacity utilization was 78.4% vs 55.4% last year.  (Source: AISI)

The World Steel Association reported global crude steel production in March increased 1.7% month-over-month on a daily average basis (up 15.2% year-over-year on a daily average basis) to 169.2 million tons. Among the top 5 producing countries, daily average output in China +2.3% m/m (+19.1% y/y), India -0.7% m/m (+23.9% y/y), Japan flat m/m (+4.6% y/y), US +1.8% m/m (+1.0% y/y), and Russia +4.6% m/m (+9.4% y/y).  (Source: World Steel Association)

Steel Dynamics expects to start up the Sinton hot-strip mill in September and expects that the mill will produce 150-200 thousand tons of HRC during the fourth quarter. (Source: Company Earnings Call)

Scrap

Ahead of the May buy week, market participants continue to expect obsolete scrap grades to be flat to up $20/ton month-over-month in May, and for prime scrap grades to be flat to up $40/ton month-over-month in May. (Source: Platts)

Fastmarkets reported that the Port of Montreal had a general strike action this week, with cargo handling and docking services at certain Port of Montreal terminals expected to cease operations. YTD through February, US steel scrap imports from Canada increased 14.5% year-over-year, as US steelmakers have relied on offshore busheling due to supply tightness for prime grades.  (Source: AMM)