News & Announcements
Market Overview – Early June 2021
The AMM shredded scrap index for Chicago increased to $450/GT, up $20/GT, from $430/GT achieved in early Apr ’21. The index is up $215/GT since late Aug ’20. Scrap prices have risen based on increased export activity, strong domestic demand and tightening supplies. Most market participants expect scrap prices to rise further in the coming month.
Mill lead times are 9-10 weeks from the West Coast and have extended to 10-12 weeks when rail is included from plate mills east of the Rockies. North American plate mills, including Nucor, SSAB, and Evraz, have issued new price increases of $100/ton in late May ’21 and $60/ton in late Apr ’21. Domestic plate mills have announced 14 price increases since May ’20 for an estimated $890/ton in cumulative increases. Domestic mills remain busy with limited mill spot tons available for summer bookings. Some plate mills have cut tonnage allocation amounts to buyers as demand remains strong. Plate mills are expected to announce an additional price increase in the coming month.
HOT ROLL SHEET
Mill lead times range between 10-13 weeks for delivery from the Midwest to the West Coast with similar lead times from West Coast mills. According to indexes, coil prices continue to notch all-time highs in late May ’21. CSI, a West Coast coil producer, announced a $200/ton increase for Aug ’21 production, which was quickly sold-out and closed. Coil demand remains elevated and is expected to continue with limited spot tons available. Backlog for automotive production, a major consumer of coil products, is building as chip supply chains are not keeping up. Overall, domestic mills have increased prices since Aug ’20 by over $1,000/ton. Coil prices are expected to climb in the coming month.
Tube mill rolling cycles are 5-6 weeks for West Coast tube mills, but reduced coil availability is pushing some mills’ rolling cycles on mechanical sizes out to 6-8 weeks. Tube mills, including Atlas, Nucor, and Maruichi, are following domestic hot roll sheet mill price increases since coil is the primary raw material used in tube manufacturing. Domestic tube mills announced recent prices increases by $125/ton in late May ’21, $100/ton in mid Apr ’21, $125/ton in mid Mar ’21, and $50/ton in late Feb ’21. Domestic tube mills have announced 14 price increases for roughly $1,175/ton since late summer ’20. Tube prices are not expected to retreat until coil prices decline and are expected to announce an additional price increase in the coming month.
Lead times are roughly 4-6 weeks for most production runs on the West Coast. Domestic merchant bar mills, including Nucor and Gerdau, issued prices increases of $50/ton in May ’21, $40/ton in Apr ’21 and $30/ton in early Mar ’21. Cumulative merchant bar price increases total $330/ton since late summer ‘20. Merchant bar demand is growing as mill floor stock is limited and mill rollings continue to book out. Merchant bar mills are expected to announce an additional price increase in the coming month.
Lead times are roughly 10-11 weeks for West Coast delivery as demand continues to strengthen. Domestic beam mills, including SDI, Gerdau and Nucor, have issued nine price increases since early Nov ’20 totaling $495/ton. The most recent price increases included $100/ton announced in late May ’21, $50/ton in early May ’21, $50/ton in mid Apr ’21 and a $50/ton announced in early Mar ’21. Mill floor stock of standard items is scarce requiring buyers to book rollings to ensure supply. Strong demand is pushing out mill lead times. Beam mills are expected to announce an additional price increase in the coming month.
Lead times are roughly 5-7 weeks from West Coast rebar mills. Domestic rebar mills, including CMC, Gerdau and Nucor, have announced cumulative price increases of $335/ton over eight announcements since late summer ‘20. Recent domestic mill price increase announcements include $40/ton in May ’21, $40/ton in late Apr ’21 and $30/ton in mid Mar ’21. Rebar demand is strong with minimal floor stock. Rebar imports are also not readily available. Cascade Steel, one of the West Coast’s few rebar mills, is experiencing unplanned downtime in its steelmaking capacity with an unknown restart. Rebar mills are expected to announce an additional price increase in the coming month.
Steel prices for all major product lines continue to increase with multiple price increases in Apr and May ‘21. Sheet, tube and plate have logged the largest gains over the last several months with cumulative price increases ranging between $890 and $1,175/ton. Scrap prices are expected to further increase due to strong demand and limited supply, which is putting increased cost pressure on finished steel. Limited trucking availability is contributing to steel supply chain issues and higher transportation costs are affecting delivered steel prices. Brent crude rose over $70/barrel in early Jun ’21 up from $38/barrel in late Oct ‘20. According to the Institute of Supply Management (ISM), the overall economy expanded in Apr ’21 for the 11th consecutive month. ISM indicates domestic manufacturing expanded with an index of 60.7 for Apr ‘21, which is down 4.0 from 64.7 in Mar ‘21. The ISM New Orders and Production Index expanded with readings of 64.3 and 62.5, respectively in Apr ’21. The ISM New Orders index is down 3.7 and the Production index is down 5.6 compared to Mar ’21. ISM readings greater than 50 signal expansion. According to the US Dept. of Labor, nonfarm payrolls increased by 266,000 in Apr ’21 and the unemployment rate was 6.1%. The US Dept. of Commerce indicated that real gross domestic product (GDP) increased at an annual rate of 6.4% in Q1 ’21. Revised estimates indicate that US GDP expanded at 4.3% in Q4 ’20 and 33.1% in Q3 ’20 after decreasing due to the pandemic by -31.4% in Q2 ’20 and -5.0% in Q1 ’20. US GDP is expected to expand in Q2 ’21.
Sources Include: Domestic Steel Mills, Scrap Processors, US Labor & Commerce Departments, ISM, AMM, Bloomberg, AP