Pricing - Have we seen the bottom? The market will dictate.

Structural tubing prices have flattened out over the last few weeks and now seem to have stopped the bleeding. Pricing on structural tubing saw its first small increase in months on Friday, August 30^th. Structural tube pricing continues to be fluid, and deals seem to be a little harder to make. 

Mechanical tubing has seen similar pricing trends as structural tubing. Pricing has seen several weeks now of flat pricing. Mechanical tube prices continue to be flat due to weak demand and uncertainty in the marketplace. DOM Surcharges and fuel surcharges have dropped for September and look to remain low going into the 4th quarter. 

Most Hot Rolled Coil (HRC) spot base prices for the first week of September range from $687 to $732 per ton. HRC steel futures have coil priced at $816 per ton for June of 2025 which means we could see some additional price increases in the coming 6-9 months but nothing dramatic. Nucor’s weekly published Consumer Spot Price (CSP) listed the HRC base price for the week of September 3 at $710/ton, unchanged from last week.    

There have not been any base price increases on cast iron since April 1st of 2022. Since January of 2024, Dura-Bar’s surcharges have seen a gradual decline in price and appear to remain flat going into the 4th quarter. Dura-Bar’s September surcharges remain at their lowest since May of 2021.

Metal Production

In the week ended August 31, US raw steel production decreased 1.2% week-over-week to 1,760,000 tons (+1.0% YoY). US capacity utilization was 80.2% vs 76.6% last year.  Year-to-date production is 59,338,000 tons down 2.0% year-over-year from 60,560,000 tons last year. (Source: AISI)

Scrap & Steel Inputs

Ahead of the September scrap trade, market participants currently expect scrap prices will decline $10-$20/ton month-over-month in September, with the sequential decline driven by a weaker export market, softer domestic demand due to planned maintenance outages, and increased scrap flows/supply. (Source: Platts)

Lead Times

Understanding lead times for steel products is crucial for everyone involved in the supply chain. Here are the current lead times for steel products (as of 9/6/24):

DOM Tubing lead times remain low. We are now anywhere from 3 to 5 weeks depending on size. Cold Drawn Seamless tubing is slightly higher in comparison to DOM and now stands at 5 to 7 weeks. HRS tubing can be obtained on the spot market, but Metallus (domestic mill) is 9-10 weeks behind and foreign HRS is roughly 3-to-5-month lead times.

Structural Tubing mill lead times remain historically low and are approximately 1-3 weeks upon receipt of order dependent on size. 

Dura-Bar Continuous Cast Iron mill lead times remain flat and are approximately 2-4 weeks depending on size, grade, and finish. If it’s a large bar, special grade, size, or shape then the lead time could be longer.   

Average HRC lead times decreased last week to 4.9 weeks, below the long-term average since 2016 of 5.6 weeks. Other products’ lead times were flat to shorter last week with CRC lead times flat at 7.7 weeks, HDG lead times down to 7.5 weeks, and plate lead times flat at 3.9 weeks. (Source: Platts)

Oil & Gas Industry

The US rig count decreased by 0.3% week-over-week to 583 rigs as of 8/30. The rig count is down 7.6% year-over-year. (Source: Baker Hughes)

Oil prices held at a 14-month low on Thursday as worries about demand in the U.S. and China and a likely rise in supplies out of Libya offset a big withdrawal from U.S. inventories and a delay to output increases by OPEC+ producers.

Brent futures were down 1 cent to settle at $72.69 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 5 cents, or 0.1%, to settle at $69.15. (Source: Reuters)

Economic Factors

The ISM Manufacturing PMI registered 47.2% in August, up from 46.8% in July.  This marks 21 of the past 22 months with domestic manufacturing contraction. (Source: Reuters)

Wall Street kicked off the month of September with a bust, after a disappointing economic report dragged down the Dow by 626 points, or 1.5%, Tuesday afternoon. (Source: CNN)

The latest manufacturing report from the Institute for Supply Management showed a fifth-straight month of declines, fueling concern that aggressive rate hikes from the Federal Reserve have inflicted too much damage on the US economy.

Steel Constraints & Roadblocks

U.S. Steel’s CEO says his company will close steel mills if its planned $14.1 billion sale to Nippon Steel is not completed. The Japan-based company has pledged to invest $3 billion into the company to maintain its older mills. If the deal collapses, U.S. Steel would likely also move its headquarters out of Pittsburgh, he said, and planned investment in older mills will not happen. (Source: Wall Street Journal)

Employment / Hiring

Nonfarm payrolls increased 142,000 in August

July payrolls growth revised down to 89,000 from 114,000

Unemployment rate falls to 4.2% from 4.3%

Average hourly earnings rise 0.4%; up 3.8% year-on-year

Manufacturing employment dropped 24,000. The retail sector shed 11,100 jobs. There were also job losses in the information industry. (Source: Reuters)

Imports & Exports

Based on preliminary import licenses, steel imports in August declined 10.1% month-over-month on a daily average basis (-4.5% YoY). Year-to-date through August imports are up 1.4% year-over-year. (Source: US Commerce Department)

The United States’ deficit in steel products has persisted for well over a decade. Exports have decreased by 9.2% between 2015 and 2023, and imports have decreased by 27.8%. In 2023, the U.S. steel trade deficit amounted to 16.9 million metric tons, a 14.9% decrease from 19.8 million tons in 2022. (Souce: U.S. Dept. of Commerce, Enforcement and Compliance)

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