News & Announcements
Market Overview – Late April 2021
The AMM shredded scrap index for Chicago decreased to $430/GT, down $20/GT, from $450/GT achieved in early Mar ’21. The index is up $195/GT since late Aug ’20. Scrap prices have firmed and recently. Some market participants are expecting a modest price increase in the next 30 days.
Mill lead times are 7-8 weeks from the West Coast and remain at 9-11 weeks when rail is included from plate mills east of the Rockies. North American plate mills, issued a new price increase of $100/ton in late Mar ’21. Domestic plate mills have announced 12 price increases since May ’20 for an estimated $730/ton increase. Limited mill spot tons can be sourced for Jun ‘21 production. Some plate mills are allocating rolling capacity to coil production, further limiting spot plate ton availability. SSAB recently issued another price increase in late Apr ’21, not included in the above figures, by $60/ton that other domestic mills are expected to follow.
HOT ROLL SHEET
Mill lead times range between 8-12 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 Apr ’21 with readings nearing $1,400/ton. CSI, a West Coast coil producer, announced a $120/ton increase for Jul ’21 production. Overall, domestic mills have announced a series of price increases since Aug ’20 moving coil indexes higher by at least $940/ton. Flat roll demand remains elevated and is expected to continue. Upcoming mill maintenance outages may have further impacts on availability, but some buyers have noted the possibility of increased availability of imports.
Tube mill rolling cycles are 4-5 weeks for West Coast tube mills, but reduced coil availability is pushing some mills’ rolling cycles on mechanical sizes out to 5-7 weeks. Tube mills are following domestic hot roll sheet mill price increases since coil is the raw material used in tube manufacturing. Domestic tube mills announced a $100/ton price increase in mid Apr ’21, a $125/ton price increase in mid Mar ’21, and a $50/ton price increase in late Feb ’21. Domestic tube mills have announced 13 price increases for roughly $1,050/ton since late summer ’20. Tube prices are not expected to retreat until sheet prices decline.
Lead times are roughly 4-6 weeks for most production runs on the West Coast. Domestic merchant bar mills, including Nucor and Gerdau, issued a $40/ton price increase in mid Apr ’21 and an early Mar ’21 price increase of $30/ton. Cumulative merchant bar price increases total $280/ton since late summer ‘20. Merchant bar demand remains stable.
Lead times are roughly 8-9 weeks for West Coast delivery as demand continues to strengthen. Domestic beam mills have now issued seven price increases since early Nov ’20 totaling $345/ton. The most recent price increases included $50/ton announced by Nucor, Gerdau and SDI in mid Apr ’21 and a $50/ton announced in early Mar ’21. Price increases for beams are due to tightening supply and elevated scrap prices. Mill floor stock of standard items is becoming increasingly scarce requiring buyers to book rollings in order to ensure supply.
Lead times are roughly 4-6 weeks from West Coast rebar mills. Domestic rebar mills have announced cumulative price increases of $255/ton over six announcements since late summer ‘20. Domestic rebar mills announced a $30/ton price increase in mid Mar ’21, with some market participants expecting another price increase in the near term.
Steel prices for all major product lines continue to increase in the past several weeks. Sheet, tube and plate have logged the largest gains over the last several months with cumulative price increases ranging between $730 and $1,050/ton. Scrap prices remain stable with the possibility of moving modestly higher in the coming month. Higher truck and rail transportation costs continue to put upward price pressure for finished steel. According to the Institute of Supply Management (ISM), the overall economy expanded in Mar ’21 for the 10th consecutive month. ISM indicates domestic manufacturing expanded with an index of 64.7 for Mar ‘21, which is up 3.9 from 60.8 in Feb ‘21. The ISM New Orders and Production Index expanded with readings of 68 and 68.1, respectively in Mar ’21. The ISM New Orders index is up 3.2 and the Production index is up 4.9 compared to Feb ’21. ISM readings greater than 50 signal expansion. According to the US Dept. of Labor, the unemployment rate was 6.0% in Mar ’21, after nonfarm payrolls increased by 916,000. The US Dept. of Commerce issued a revised Q4 ’20 estimate of GDP that expanded at 4.1%. Q3 ’20 GDP expanded at 33.1%, after decreasing due to COVID-19 effects on the US economy by -31.4% in Q2 ’20 and -5.0% in Q1 ’20. US GDP is expected to significantly expand in Q1 and Q2 ’21.
Sources Include: Domestic Steel Mills, Scrap Processors, US Labor & Commerce Departments, ISM, AMM, Bloomberg, AP