News & Announcements
Market Overview – Mid December 2017
The AMM Shredded Scrap Index for Chicago increased $30/GT as of mid Dec ’17 to $293/GT from mid Nov ‘17. The index is down $30/GT since the year high point reached in mid Mar ‘17. AMM shredded Chicago scrap is a general indicator used by some domestic electric arc furnace mills to help determine price changes for finished steel products. Market participants are expecting prices to move higher in the coming month based on strengthening US demand, rising export prices, and tightening supplies from seasonal winter conditions.
Mill lead times have a broad range of 5-6 weeks for West Coast delivery but can be as long as 8-9 weeks from some Midwest mills when rail is included. Domestic plate mills announced (3) price increases totaling $130/ton between Nov and mid Dec ’17. Some suggest that not all of the recent price increases have been fully accepted yet as some plate mills work towards filling their backlog. Domestic plate prices are starting 2018 higher than a year ago.
Mill lead times are at roughly 6-8 weeks for delivery from the Midwest to the West Coast with similar lead times from West Coast mills. Domestic sheet mills have announced (2) price increases totaling $60/ton between mid Nov and early Dec ’18. Price changes are supply and cost related as demand is not improving significantly.
Tube mill rolling cycles are roughly 4-5 weeks for West Coast tube mills. Domestic tube mills announced (2) price increases of $30/ton each, totaling $60/ton, between mid Nov and mid Dec ’17. Tube demand is stable and prices have increased based on changes in the sheet market with is the raw material for the tube manufacturing process.
Lead times remain at roughly 4-7 weeks for most production runs on the West Coast. Domestic merchant bar mills’ issued a price increase of $30/ton in mid Dec ’17. Domestic merchant bar prices decreased by $60/ton in late Sep ’17. The recent price increase of $30/ton is most likely due to rising scrap prices and not due to an increase in demand.
Lead times are roughly 6-7 weeks for West Coast delivery. Domestic beam mills announced a price increase of $40/ton in mid Dec ’17 after decreasing list prices by $80/ton in late Sep ‘17. Domestic year over year beam demand has been steady with fewer imports to challenge domestic production.
Chicago shredded scrap prices increased by $30/GT over the past month with prices expected to climb higher. Carbon plate, sheet, and tube mills all announced multiple price increases from Nov to mid Dec ’17. Merchant bar and beam mills announced just one price increase in Dec ‘17. Market participants continue to look to the Dept. of Commerce to conclude its Section 232 investigation and release its report that is due mid Jan ‘18. The pending Section 232 investigation could yield an outcome that impacts steel imports with tariffs, quotas, or both. According to the Institute of Supply Management (ISM), the overall economy grew for the 102nd consecutive month in Nov ‘17. ISM indicates domestic manufacturing expanded with an index of 58.2 for Nov ‘17, which is down slightly from 58.7 in Oct ‘17. The ISM New Orders and Production Index expanded with readings of 64 and 63.9 respectively in Nov ‘17, up from 63.4 and 61 in Oct ‘17. ISM readings greater than 50 signal expansion. The US Labor Dept. showed non-farm payrolls increasing in Nov ‘17 by 228,000 jobs with an unemployment rate at 4.1%. The US Dept. of Commerce has issued a revised estimate of GDP expansion of 3.3% in Q3 ‘17, 3.1% in Q2 ’17, and 1.2% in Q1 ‘17.
Sources include: AMM, ISM, Bloomberg, AP, US Labor & Commerce Departments, Domestic Steel Mills