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POSTED January 14, 2022

Market Overview – Mid January 2022

Steel Market Overview – Mid January 2022


The AMM shredded scrap index for Chicago was flat for Dec ’21 at a high of $540/GT. The index closed 2021 up $305/GT compared to late Aug ’20. Scrap prices remained high throughout 2021 based on increased export activity, strong domestic demand, and tightening supplies. Shredded scrap prices are down $59/GT in early Jan ’22 to start the year.


Mill lead times are 6-8 weeks from the West Coast and are 8-10 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 $40/ton in late Nov ’21 and $50/ton in Oct ‘21. Domestic plate mills have announced 19 price increases since May ’20 for an estimated $1,220/ton in cumulative increases. Prices are not expected to increase throughout the balance of the month.


Mill lead times range between 8-10 weeks for delivery from the Midwest to the West Coast with similar lead times from West Coast mills. According to indexes, coil prices notched all-time highs in mid-Oct ’21, but prices have steadily eroded in recent months. CSI, a West Coast coil producer, most recent adjustments include a $160/ton decrease for Feb ’22 production, preceded by a $140/ton reduction for Jan ‘22 production. Prior to the early 2022 price changes, CSI included an $80/ton increase for Oct ’21 production, a $60/ton increase for Nov ’21 production, and no change for Dec ’21 production. Overall, domestic mills increased prices between Aug ’20 and Oct ’21 by over $1,506/ton, but have given back $400/ton between mid-Oct ’21 and Jan ’22.

HSS TUBE                  

Tube mill rolling cycles are 5-6 weeks for West Coast tube mills. Domestic tube mills, including Atlas, Nucor, and Maruichi, are starting to follow domestic hot roll sheet mill price decreases since coil is the primary raw material used in tube manufacturing. Domestic tube prices have slid roughly $200/ton from mid-Nov ’21 to mid-Jan ’22. Domestic tube mills had announced 18 consecutive price increases until the most recent reduction putting the total increase at roughly $1,585/ton since late summer ’20. Future Tubing prices are expected to decrease as coil prices retreat.


Lead times are roughly 4-6 weeks for most production runs on the West Coast. Domestic merchant bar mills, including Nucor and Gerdau, issued price increases of $50/ton in early Aug ’21 and $50/ton in early Nov ’21. Cumulative merchant bar price increases total $540/ton since late summer ‘20. Mill floor stock continues to be 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. Prices are not expected to increase in the balance of the month.


Lead times are roughly 8-10 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 for standard items is limited requiring buyers to book rollings to ensure supply. After the most recent mill increase, Beam mills are expected to maintain current prices for the balance of the month.


Lead times are roughly 5-7 weeks from West Coast rebar mills. Domestic rebar mills, including CMC, Gerdau, and Nucor, Announced a $30/ton price increase in early Dec ’21. Rebar mills have announced cumulative price increases of $485/ton over twelve announcements since late summer ‘20. Rebar demand is strong with minimal floor stock. With scrap prices decreasing, rebar prices are not expected to increase for the balance of the month.


Steel prices for most product lines are either at or near all-time highs with hot roll sheet and tube prices in retreat. Scrap pricing is down in early Jan ‘22. According to the Institute of Supply Management (ISM), the overall economy expanded in Dec ’21 for the 19th consecutive month. ISM indicates domestic manufacturing expanded with an index of 58.7 for Dec ‘21, down from 61.1 in Nov ‘21. The ISM New Orders and Production indexes expanded at 60.4 and 59.2 respectively in Dec ’21. ISM New Orders and Production indexes decreased by 1.1 and 2.3 respectively in Dec ’21 compared to Nov ‘21. ISM readings greater than 50 signal expansion. According to the US Dept. of Labor, nonfarm payrolls increased by 199,000 in Dec ’21 and the unemployment rate decreased to 3.9% in Dec ‘21. The US Dept. of Commerce indicated that real gross domestic product (GDP) increased at an annual rate of 2.3% 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 and Q1 ’22.

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

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