News & Announcements

POSTED March 14, 2014

Market Overview - March 2014

Scrap

The AMM Shredded Scrap Index for Chicago decreased by $20/GT and now stands at $388/GT as of early March 2014 from early February 2014. AMM Shredded Chicago scrap is generally used as an index by most domestic electric arc furnace mills to help determine price changes for finished steel products. Domestic scrap prices have decreased for two consecutive months, but early indicators suggest export prices are starting to increase. The next 30 day outlook is uncertain as scrap price momentum may be changing.

Carbon Plate

Mill lead times are roughly 7 - 8 weeks for delivery from the Midwest with shorter lead times from the West Coast. Domestic plate mills Evraz, ArcelorMittal, SSAB, and Nucor have announced cumulative price increases of $130/ton between October 2013 and January 2014. Plate mill lead times have not showed much pull back in the past two months.

Carbon Sheet

Mill lead times are roughly 6 - 7 weeks from the West Coast and 7 - 8 weeks from the Midwest. Domestic sheet mills including ArcelorMittal and Nucor announced cumulative $70/ton price increases from early October 2013 through December 2013 impacting transaction prices in Q1 2014. However, price discounting from some market participants have undermined some of the price increases primarily driven by overcapacity. HSS Tubing Tube mill rolling cycles are holding at roughly 4 - 5 weeks for West Coast tube mills. Midwest and West Coast tube mills announced cumulative $60/ton price increases between October 2013 and December 2013. The basis for price increases was due to announced domestic sheet mill price increases. Domestic tube mills will most likely not be increasing prices in the coming 30 days due to sheet price weakening.

Merchant Bar

Lead times remain at roughly 4 - 7 weeks for most production runs on the West Coast. After holding prices for five consecutive months, domestic mills announced cumulative price increases of $60/ton between November 2013 and January 2014. Gerdau has announced an additional $20/ton price increase in March 2014.

Beams

Lead times are roughly 6 - 8 weeks for West Coast delivery. Like merchant bars, domestic beam mills had left prices unchanged for several months, but changed direction and announced cumulative price increases of $35/ton between November 2013 and December 2013. Gerdau and Nucor announced an additional $20/ton price increase in March 2014.

Market Overview

Carbon price announcements made by domestic mills were comprehensively up from October 2013 through January 2014. Some mills have announced additional increases for beam and merchant bar products in March 2014, whereas, pricing deterioration has occurred in sheet products in the past month. Scrap prices increased significantly by $81/ton through early January 2014 over Q4 2013, but have declined over the past two months. According to the Institute of Supply Management (ISM), the overall economy grew for the 57th consecutive month. ISM indicates domestic manufacturing expanded with a reading of 53.2 for February 2014, which is up from January 2014 reading of 51.3. The ISM New Orders and Production Index also reported readings of 54.5 and 48.2 in February 2014 up from 51.2 and down from 54.8 in January 2014 respectively. ISM readings greater than 50 signal expansion. The US Labor Department showed payrolls increasing in February 2014 by 175,000 jobs with an unemployment rate of 6.7%. The US Department of Commerce revised report indicates that GDP grew at an annual rate of 2.4% in Q4 2013 and 4.1% in Q3 2013.

Sources include: AMM, ISM, Bloomberg, AP, US Labor & Commerce Departments, Domestic Steel Mills.