Pricing & Lead Times are Still Growing

Pricing

Steel prices yet again are continuing to rise through June and into July. With a continued 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 the second week of July, the steel pricing index known at the CRU has now increased 46 weeks in a row. The CRU index has seen a 130% increase in the steel index since the first week of December and a 189% increase since the first week of October 2020. This marks the 11^th month in a row that the CRU index has increased. Nucor Tubular and Atlas Tube (the two largest structural tubing mills) raised prices on HSS, pipe, mechanical, and piling products by $125/ton in early June and have just now announced an additional increase of $125/ton on July 13th, 2021.  This newest increase in July was the 17th round of price increases since August of 2020.  With regards to DOM, most mill pricing has increased 11 times for a total of 74-77% overall since the beginning of October 2020. Most recently we have just received notice of all cold drawn and hot finish seamless products going up by $50/ton effective July 4^th, 2021. Fortunately, we did not see an increase in June for DOM. The below charts reflect a current listing of all price increases on tubing that we have seen since late August of 2020. 

The US Midwest aluminum premium hit another all-time high this week following more than three weeks of stability, with Fastmarkets assessing the premium at $0.275-$0.285/pound. Some market participants are speculating the temporary export duty in Russia, effective August 1-December 31, 2021, will have an impact on aluminum, steel, copper, and nickel. (Source: AMM) SSAB Americas increased plate prices by another $50/ton, just days after lifting tags by $100/ton. (Source: Platts)  Steel plate prices increased for the 4th consecutive week, with Fastmarkets' weekly price for cut-to-length plate assessed at $1,500/ton. (Source: AMM)

Pricing on all continuous cast iron products continues to climb. This can be attributed to higher raw material surcharges, commodities, utilities, base price increases, and an increased cost of freight. Base prices increased in February with additional significant base price increases implemented July 1^st, 2021. Common sizes of gray iron increased roughly ~12% and common sizes of ductile iron increased roughly ~8%.  Harder to produce and specialty sizes increased significantly more than that. We are also expecting an additional increase on August 1^st, 2021, of 8% on all ductile and gray iron base prices. 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 7/7/21):

HRC lead times remain steady this week at 8.3 weeks versus an average of ~5.5 weeks since 2016. Other product lead times were mixed this week with CRC lead times at 9.9 weeks, HDG lead times at 11.4 weeks, and plate lead times at 9.1 weeks. (Source: Platts)

DOM Tubing is anywhere from 25-34 weeks given the availability of raw steel coils and orders already on the books.

Structural Tubing mill lead times are running approximately 10-14 weeks upon receipt of order.

Dura-Bar Continuous Cast Iron mill lead times are approximately 4-12 weeks depending on size and grade.

Metal Production

In the week ended June 26, US raw steel production decreased 0.2% week-over-week to 1.835mt (+44.3% YoY). US capacity utilization was 82.7% vs 56.8% last year.  Year-to-date production is 45.054mt up 15.2% year-over-year from 39.109mt last year. (Source: AISI)

Cleveland-Cliffs will idle Indiana Harbor #7 blast furnace (the largest blast furnace in North America) for 45 days from September 1 for scheduled maintenance. The blast furnace has an annual production capacity of 4.2 million tons per year. (Source: AMM) SSAB Americas plans to take a three-week outage at its plate mill in Mobile, Alabama, in late November and early December. (Source: SMU)

Scrap

Ahead of the July buy week, most market participants expect shredded scrap prices will increase $20-$30/ton month-over-month, while prime scrap prices are expected to increase $20-$40/ton month-over-month. (Source: Platts)