State of Steel - June 2022

Pricing - Which way will it go? Structural vs. HRS and DOM Drastically Different. 

Steel pricing continues to be very unstable. Due to many factors, the price of steel continues to stay high but has leveled out over recent weeks. At the beginning of May, the CRU index sat at $1,447 per ton. As of June 1st, we now sit at $1,253 per ton. That amounts to a decrease of 13.4% since the beginning of May! This drop in the index pricing has not made its way to the market yet but could impact structural tubing more than anything else. The market is at a standstill, so buyers are very cautious because they do not want to be stuck with expensive inventory. Demand is still strong though which remains a good sign for the industry. The instability in steel pricing and availability continues to be attributed to the Ukraine war, a decrease in imports due to difficulties at ports, an increased cost of inputs, and a shortage of labor. 

Due to the recent May decline in the CRU index, June saw its first structural tubing price decrease since February of 2022. Futures appear to be somewhat stable with a possibility of gradual decreases. With regards to DOM and HRS tubing, we have seen increases in May through fuel surcharges, CRU adjustments and monthly surcharge adjustments. Mechanical tubing (dom, hrs, cds) mills are struggling to keep up with demand and due to that, the pricing looks to continue to stay flat to high. These “surcharges” and prices are going up due to freight costs, fuel costs, demand, long lead times and increases in raw material costs.  We did recently see one of our mills try to increase pricing however it did not stick and was retracted. Cold drawn and hot rolled seamless tubing saw an additional $200 per ton increase in March and will probably continue to increase. The below charts reflect the CRU index, and a current listing of all price increases/decreases on tubing that we have seen since late August of 2020.

Nucor alerted customers it will be lowering prices for all new and unshipped plate orders by $50-$200/ton, effective immediately. Prices for as-rolled and normalized plate will be cut by $50/ton, prices for cut-to-length plate less than 72 inches wide will be slashed by $200/ton, and prices for cut-to-length plate 72-84 inches wide will be cut by $100/ton. (Source: Platts)


The month of May did not see any base increases for cast iron. However, pricing is still settling out from the April base price increases of $0.02/lb. on ductile grades and $0.04/lb. on gray iron. The latest April base price increase comes on the heels of 4 base price increases in 2021. Surcharges appear to have topped out and have declined for June. We look to be at the peak and could begin to see some relief in the form of surcharges. 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 06/06/22):

Average HRC lead times decreased last week to 5.0 weeks, which is below the average of 5.6 weeks since 2016. Other product lead times were flat to lower last week with CRC lead times at 6.6 weeks, HDG lead times at 6.8 weeks, and plate lead times at 5.2 weeks. (Source: Platts)

DOM, HRS, and CDS Tubing lead times continue to be very long and are anywhere from 25 to 32 weeks primarily now due to backlog. We continue to see lead times be long and are now seeing availability not free up until 2023. 

Structural Tubing mill lead times are steady and running approximately 4-5 weeks upon receipt of order. Common sizes we can get sooner for now.

Dura-Bar Continuous Cast Iron mill lead times are approximately 8-14 weeks depending on size, grade, and finish. If it’s a large bar, special grade, size, or shape then the lead time could be considerably longer. We are currently struggling to inventory large gray iron billets for our plate department but are looking to resolve this as best we can. We are experiencing longer lead times for round bars under 2” diameter.   

Metal Production

In the week ended May 28, US raw steel production increased 0.5% week-over-week to 1,798,000 tons (-2.0% YoY). US capacity utilization was 82.4% vs 81.0% last year. Year-to-date production is 37,093,000 tons down 1.5% year-over-year from 37,677,000 tons last year. (Source: AISI)

Scrap & Steel Inputs

The June scrap buy week has yet to commence, with market sources indicating the Midwest market will likely be the weakest due to ample supplies and mills with small to no buying programs. Market sources broadly expect prices in June will fall by $30/ton month-over-month on prime and by $50/ton on secondary grades, with some indicating prices could be down $70/ton or more. (Source: AMM) US pig iron prices continued to fall sharply last week with prices now at $810/ton, down ~7% week-over-week and down ~14% month-over-month. (Source: Platts)

Oil & Gas Industry

The US rig count decreased 0.1% week-over-week to 727 rigs as of 5/27. The rig count is up 59.1% year-over-year. (Source: Baker Hughes) OPEC and its oil-producing allies agreed to hike output in July and August by a larger-than-expected amount. The group (OPEC-Plus) will increase production by 648 thousand barrels per day in both July and August. (Source: CNBC)


The US has increased antidumping duties on hot-rolled coil steel imports from Japan. The weighted-average antidumping duty margin rates were increased to 24.07%, prior to the review, the weighted-average antidumping duty margin percentages were 4.99% to 7.51% depending on the mill. (Source: SMU)

Steel Demand Outlook

Nucor is taking a one-week outage from May 31 - June 7 at its Gallatin sheet mill, for final equipment installation. (Source: SMU)

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