News & Announcements
Market Overview – Mid August 2021
The AMM shredded scrap index for Chicago decreased to $480/GT, down $20/GT, from $500/GT achieved in early Jun ’21. The index is up $245/GT since late Aug ’20. Scrap prices have risen throughout the year based on increased export activity, strong domestic demand and tightening supplies. However, some market participants expect scrap prices to ease further in the coming month as exports soften and some domestic mills have planned maintenance outages in Sep ‘21.
Mill lead times are 8-9 weeks from the West Coast and have remain 10-11 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 $120-$150/ton in Jun ’21 and $120-$150/ton in late Jul ’21. Domestic plate mills have announced 16 price increases since May ’20 for an estimated $1,130/ton in cumulative increases. At a minimum, plate purchased from the mill is $5,760 more expensive per 24-ton truckload than it was in early Jun ‘21. Domestic plate mills are expected to announce an additional price increase in the coming month.
HOT ROLL SHEET
Mill lead times range between 10-12 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 mid Aug ’21. CSI, a West Coast coil producer, announced a $200/ton increase for Aug ’21 production, a $200/ton increase for Sep ’21 production and a $80/ton increase for Oct ’21 production, which have all been sold-out and closed. Overall, domestic mills have increased prices since Aug ’20 by over $1,480/ton according to indexes and have risen $320/ton since early Jun ‘21. Coil purchased from CSI is roughly $11,520 more expensive per 24-ton truckload than it was prior to Aug ’21 production.
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. Domestic 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 price increases of $125/ton in mid Jun ’21, $125/ton in mid Jul ’21, and $125/ton in mid Aug ’21. Domestic tube mills have announced 18 price increases for roughly $1,685/ton since late summer ’20. Tube prices are not expected to retreat until coil prices decline. Tube purchased from domestic mills is roughly $9,000 more expensive per 24-ton truckload than it was prior to the past (3) increases in early Jun ‘21.
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 $70/ton in early Jun ’21, $40/ton in mid Jul ’21 and $50/ton in early Aug ’21. Cumulative merchant bar price increases total $490/ton since late summer ‘20. Mill floor stock is limited and mill rollings continue to book out. Merchant bars purchased from the mill are $3,840 more expensive per 24-ton truckload than they were in early Jun ’21.
Lead times are roughly 9-10 weeks for West Coast delivery as demand remains strong. Domestic beam mills, including SDI, Gerdau and Nucor, have issued eleven price increases since early Nov ’20 totaling $605/ton. The most recent price increases included $100/ton announced in late May ’21, $60/ton in late Jun ’21, and $50/ton in late Jul ’21. Mill floor stock of standard items is scarce requiring buyers to book rollings to ensure supply. Beam purchased from domestic mills is roughly $5,040 more expensive per 24-ton truckload than it was prior to the past (3) increases in mid-May ‘21. 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 $415/ton over ten announcements since late summer ‘20. Recent domestic mill price announcements included minimum increases of $50/ton in mid Jun ’21 and $30/ton in Jul ’21. Rebar demand is strong with minimal floor stock. Cascade Steel, one of the West Coast’s few rebar mills, is expected to restart production in the coming month after a prolonged unplanned downtime. 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 issued over the last several months. At a minimum, mill prices have increased since early Jun ’21 by $375/ton for tube, $320/ton for coil, $240/ton for plate, $160/ton for merchant bars, $110/ton for beam and $80/ton for rebar. Scrap prices are expected to soften modestly in the coming 30 days, which may take some pressure off finished steel prices. Several variables may have an impact on steel mill price direction, up or down, including infrastructure policy, COVID resurgence, labor market, and global supply chain volatility. According to the Institute of Supply Management (ISM), the overall economy expanded in Jul ’21 for the 14th consecutive month. ISM indicates domestic manufacturing expanded with an index of 59.5 for Jul ‘21, which is down 1.1 from 60.6 in Jun ‘21. The ISM New Orders and Production Index expanded with readings of 64.9 and 58.4, respectively in Jul ’21. The ISM New Orders index is down 1.1 and the Production index is down 2.4 compared to Jun ’21. ISM readings greater than 50 signal expansion. According to the US Dept. of Labor, nonfarm payrolls increased by 943,000 in Jul ’21 and the unemployment rate was 5.4%. The US Dept. of Commerce indicated that real gross domestic product (GDP) increased at an annual rate of 6.5% in Q2 ’21. Revised estimates indicate that US GDP expanded at 6.3% in Q1 ’21, 4.5% in Q4 ’20 and 33.8% in Q3 ’20 after decreasing due to the pandemic by -31.2% in Q2 ’20 and -5.1% in Q1 ’20. US GDP is expected to expand in Q3 ’21.
Sources Include: Domestic Steel Mills, Scrap Processors, US Labor & Commerce Departments, ISM, AMM, Bloomberg, AP