Pricing - Flat but may be on the rise now that the US election is over.

The domestic steel market may be starting to recover from the pause associated with the U.S. election, sparking hopes for potential growth soon. Prices are mixed, with most flat-rolled products trending downward, although some indexes indicate stability. Structural tubing prices have remained steady and stable since July, marking the longest period of price consistency in the steel market since 2020.

Mechanical tubing has followed similar pricing trends as structural tubing, with prices holding steady for several months. Demand remains weak, and market uncertainty continues to keep mechanical tube prices flat. DOM surcharges have been absent since June and show no signs of returning soon. Fuel surcharges have also stayed low and stable for November.

Most Hot Rolled Coil (HRC) spot base prices for the first week of September range from $660 to $750 per ton. Reports of improved sentiment following the presidential election have yet to result in higher HRC prices. Market participants have observed a positive shift in attitude since Donald Trump’s re-election on Tuesday, November 5. However, this surge in enthusiasm has not yet translated into increased demand or a wave of purchases. Nucor’s weekly published Consumer Spot Price (CSP) listed the HRC base price for the week of November 12th at $750/ton, unchanged from the previous week. Cleveland-Cliffs kept their base price for HRC for spot orders to $750 per ton flat from last month.  

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 October surcharges remain at their lowest since May of 2021.          

Scrap & Steel Inputs

Global scrap markets remain slow due to weak steel sales. US ferrous scrap trade shows no signs of activity aside from several cancellations. The US ferrous scrap trend indicator remains stable at 53.5 in November. This results from an expected 3% rise in scrap prices throughout the month. The market consensus is high at 62%, with both buyers and brokers at a neutral 50.0 while the more positive sellers scored 60.4 (Source: FastMarkets)

U.S. shredded steel scrap prices increased 3.76% to $366 per short ton. Chinese HRC prices appeared bullish, with a 9.92% rise to $463 per metric ton as of November 1. (Source: Metalminer)

The November scrap trade settled in the Midwest at unchanged prices compared to October levels. This was better than initial expectations of scrap prices declining $10-20/ton. Iron ore and coking coal were up while Zinc was down this past week. Zinc is $3052 per ton down from $3102 per ton from last week. (Source: Platts)

Metal Production

In the week ended November 9, US raw steel production increased 1.2% week-over-week to 1,649,000 tons (-2.3% YoY).  US capacity utilization was 74.2% vs 73.4% last year. Year-to-date production is 75,760,000 tons down 2.1% year-over-year from 77,360,000 tons last year.  (Source: AISI)

Key steel products with a significant import increase in September compared to August are mechanical tubing (up 15%) and hot rolled bars (up 15%). Products with a significant increase in imports over the 12-month period October 2023 to September 2024 compared to the previous 12-month period include sheets and strip all other metallic coated (up 53%), sheets and strip hot dipped galvanized (up 31%), wire rods (up 26%), cold rolled sheets (up 15%) and heavy structural shapes (up 12%). (Source: AISI)

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 11/20/24):

DOM Tubing lead times remain low. We are now anywhere from 3 to 6 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 sitting on a 3-to-5-month lead time.

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.   

The average HRC lead times increased last week to 5.4 weeks, still slightly below the long-term average since 2016 of 5.6 weeks.  Other product lead times were flat to shorter last week with CRC lead times flat at 6.8 weeks, HDG lead times down to 6.9 weeks, and plate lead times flat at 3.7 weeks. (Source: Platts)

Oil & Gas Industry

The US rig count was unchanged week-over-week at 585 rigs as of 11/8. The rig count is down 5.0% year-over-year.  (Source: Baker Hughes)

Fuel costs fluctuated last week: gasoline and diesel prices dropped, while heating oil saw an increase. Oil, gasoline, and heating oil futures all declined again over the week.

Gas prices edged down to $3.18 per gallon, the lowest level since late 2023. This seasonal trend of declining prices is expected to continue in the coming weeks. Diesel prices also fell, reaching $3.52 per gallon, about $0.78 per gallon lower than the same time last year.

U.S. oil and gas producers anticipate an easier path to expanding production and exploration under Donald Trump’s upcoming second administration. However, the greater challenge may lie in securing profitable local markets for their output. European countries are expected to face tariff increases from the incoming administration, as the longstanding U.S. trade deficit with Europe—approximately $240 billion annually—remains a significant concern for Trump’s allies. (Source: Reuters)

(Source: Kpler)

Steel Constraints & Roadblocks

General Motors is laying off about 1,000 workers worldwide, shedding costs as it tries to compete in a crowded global automobile market. The workers, mostly white collar, were notified about the decisions early Friday.

Nippon’s Vice Chairman and EVP Takahiro Mori said during a press conference that he continues to anticipate closing the acquisition of US Steel by the end of 2024. Further, Mr. Mori said the US CFIUS review was going smoothly. USS maintains that Nippon's acquisition will be finalized by the end of the year. (Source: Bloomberg)

The Trump administration is expected to swiftly enforce the USMCA agreement with Mexico, following repeated instances of disregarding quota limits.

Economic Factors

As the clock winds down on President Biden's term, administration officials are racing to secure the legacy of his climate and infrastructure initiatives before President-elect Donald Trump takes office in January. Trump has vowed to halt clean-energy projects and revoke unspent funds from Biden's landmark climate and healthcare legislation. To safeguard progress, the Biden administration is pushing to implement key programs funded under the $1 trillion infrastructure law and the $375 billion climate law. Officials aim to ensure that money continues to flow and projects endure beyond Biden's presidency. On November 15, Transportation Secretary Pete Buttigieg announced over $3.4 billion in grants for initiatives aimed at enhancing passenger rail service, improving U.S. ports, reducing highway fatalities, and advancing domestic manufacturing of sustainable transportation materials.

In recent months, announcements of major environmental grants and project approvals have accelerated, with White House officials describing this push as a “sprint to the finish” of Biden’s term. The Environmental Protection Agency (EPA) has set a nationwide deadline for removing lead pipes and has allocated nearly $3 billion to help local water systems comply. Additionally, the EPA has mandated that, for the first time, oil and gas companies must pay federal fees for emitting methane above certain thresholds. Meanwhile, the Department of Energy (DOE) recently approved a $544 million loan to a Michigan company to expand the manufacturing of high-quality silicon carbide wafers for electric vehicles. This loan is part of a clean-energy loan program, revived and expanded under Biden, which has granted 28 deals totaling $37 billion.

Americans' credit card debt reached a new record by the end of September, according to a report from the New York Federal Reserve. Total credit card debt climbed to $1.17 trillion in the third quarter, an increase of $24 billion from the previous quarter. This marks the highest level recorded since the Fed began tracking this data in 2003. Although credit card debt remains above pre-pandemic levels, delinquencies showed slight improvement last quarter, falling to 8.8% from 9.1% in the previous quarter.

Employment / Hiring

Total nonfarm payroll employment was essentially unchanged in October (+12,000), and the unemployment rate was unchanged at 4.1 percent. Employment continued to trend up in health care and government. Temporary help services lost jobs. Employment declined in manufacturing due to strike activity. Manufacturing employment decreased by 46,000 in October, reflecting a decline of 44,000 in transportation equipment manufacturing that was largely due to strike activity. Employment in construction changed little in October (+8,000). The industry had added an average of 20,000 jobs per month over the prior 12 months. Over the month, nonresidential specialty trade contractors added 14,000 jobs. Employment showed little or no change over the month in other major industries, including mining, quarrying, and oil and gas extraction; wholesale trade; retail trade; transportation and warehousing; information; financial activities; leisure and hospitality; and other services. (Source: BLS)        

Imports & Exports

Based on the Commerce Department’s most recent Steel Import Monitoring and Analysis (SIMA) data, the American Iron and Steel Institute (AISI) reported today that steel import permit applications for the month of October totaled 2,186,000 net tons (NT)*. This was a 6.3% decrease from the 2,333,000 permit tons recorded in September and a 2.3% increase from the September final imports total of 2,137,000. Import permit tonnage for finished steel in October was 1,732,000, up 2.2% from the final imports total of 1,695,000 in September. For the first ten months of 2024 (including October SIMA permits and September final imports), total and finished steel imports were 24,458,000 NT and 18,978,000 NT, up 1.7% and 2.1%, respectively, from the same period in 2023. The estimated finished steel import market share in October was 21% and is 23% year-to-date (YTD). (Source: AISI)