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POSTED November 11, 2021

Market Overview – Mid November 2021


The AMM shredded scrap index for Chicago increased in Nov ’21 to $539/GT, up $54/GT from $485/GT achieved in early Oct ’21. The index is up $304/GT since late Aug ’20. Scrap prices have risen throughout the year based on increased export activity, strong domestic demand and tightening supplies. Some market participants expect scrap prices to possibly increase in the coming month as some domestic mills have completed planned maintenance outages and lead times extend into 2022.


Mill lead times are 8-9 weeks from the West Coast and have remained 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 $50/ton in late Oct ‘21. Domestic plate mills have announced 18 price increases since May ’20 for an estimated $1,180/ton in cumulative increases. At a minimum, plate purchased from the mill is $6,960 more expensive per 24-ton truckload than it was in the summer of ‘20.


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 Oct ’21, but prices have started to ease by $60/ton in recent weeks. CSI, a West Coast coil producer, most recent increases include a $200/ton increase for Sep ’21 production, an $80/ton increase for Oct ’21 production, a $60/ton increase for Nov’21 production, and no change for Dec ’21 production which have all been sold-out and closed. Overall, domestic mills have increased prices since Aug ’20 by over $1,620/ton according to indexes and have risen $460/ton since early Jun ‘21. Coil purchased from CSI is roughly $14,880 more expensive per 24-ton truckload than it was in the summer of ‘20.

HSS TUBE                  

Tube mill rolling cycles are 5-6 weeks for West Coast tube mills. 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 Aug ’21 and $75/ton in late Sep ‘21. The last increase was not accepted in the market and was subsequently rescinded. 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 further. Tube purchased from domestic mills is roughly $9,000 more expensive per 24-ton truckload than it was in the summer of ‘20.


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 early Aug ’21 and $50/ton early Nov ’21. Cumulative merchant bar price increases total $540/ton since late summer ‘20. Mill floor stock is limited, but mill rolling availability is starting to improve. Merchant bars purchased from the mill are $5,040 more expensive per 24-ton truckload than they were in the summer of ‘20.


Lead times are roughly 9-10 weeks for West Coast delivery as demand remains steady. Domestic beam mills, including SDI, Gerdau and Nucor, have issued twelve price increases since early Nov ’20 totaling $655/ton. The most recent price increases included $50/ton in late Jul ’21 and $50/ton early Nov ‘21. Mill floor stock of standard items are limited requiring buyers to book rollings to ensure supply. Beam purchased from domestic mills is roughly $6,240 more expensive per 24-ton truckload than it was in the summer of ‘20. After the most recent mill increase, Beam mills expect prices to remain flat through the rest of ’21.


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 $455/ton over eleven announcements since late summer ‘20. Recent domestic mill price announcements included minimum increases of $30/ton in Jul ’21 and $40/ton in late Oct ‘21. Rebar demand is strong with minimal floor stock. Rebar mills are expected to announce an additional price increase in the coming month.


Steel prices for all major product lines are either at or near all-time highs. Scrap prices are expected to increase in the coming 30 days. Several variables may have an impact on steel mill price direction, including infrastructure policy details, COVID fluctuations, labor market, global supply chain volatility and Section 232 tariff and quota renegotiations between the US and the EU. According to the Institute of Supply Management (ISM), the overall economy expanded in Oct ’21 for the 17th consecutive month. ISM indicates domestic manufacturing expanded with an index of 60.8 for Oct ‘21, which is down .3 from 61.1 in Sep ‘21. The ISM New Orders and Production Index expanded with readings of 59.8 and 59.3, respectively in Oct ’21. The ISM New Orders index is down 6.9 and the Production index is down .1 compared to Sep ’21. ISM readings greater than 50 signal expansion. According to the US Dept. of Labor, nonfarm payrolls increased by 531,000 in Oct ’21 and the unemployment rate was 4.6%. The US Dept. of Commerce indicated that real gross domestic product (GDP) increased at an annual rate of 2.0% in Q3 constrained by supply chain problems. Revised estimates indicate that US GDP expanded at 6.7% in Q2 ’21, 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 Q4 ’21.


Sources Include:  Domestic Steel Mills, Scrap Processors, US Labor & Commerce Departments, ISM, AMM, Bloomberg, AP

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