I’m trying to make sure this is not a TL;DR Final Thoughts. As a journalism school professor once told me, ‘No one but your mom reads more than 1,000 words.’ Also, as the old adage goes, a picture is worth a thousand as well.
With that in mind, below are a couple of charts I think go a long way toward explaining how prices and lead times have been relatively stable despite concerns about demand.
Take a look at the chart below. We asked a simple question: “How did your company perform last month compared to your forecast?”
Rewind to 2022. The vast majority of folks responding to our surveys said they were meeting or exceeding forecast. (There is no data for Q1’22 because we hadn’t introduced the question yet.) In most months, only 5-10% said they were missing target.
The number missing forecast increased to roughly 15-30% in 2023. In 2024, it’s ticked steadily (if unevenly) higher from there. And 51% of respondents in our survey this week said they missed forecast in September.
I try not to read too much into any one survey. Even so, it’s worth noting that that’s the highest number we’ve seen since we’ve been asking this question.
Ethan Bernard has more on the troubles at Stellantis here. As for 2009, I feel like it’s sort of steel’s version of “Voldemort.” Don’t say it. Or it’ll come back and hunt you down.
I’m not in the 2009 camp. And I’m not sure the person who wrote that is either. Because while volumes might be off, prices are a lot better now than they were then.
SMU’s price for hot-rolled (HR) coil averages $695 per short ton (st) now. Rewind to 2009, and HR prices were as low as $380/st, according to our pricing archives. Adjusted for inflation, that’s about $555/st in 2024 dollars. (That’s according to the US government’s inflation calculator.)
If demand and volumes are off, what’s keeping prices steady around $700/st?
This might be oversimplifying it. But simply put, domestic production fell sharply in mid/late September and early October.
Some of that might be steelmakers ratcheting back production in response to weaker demand. A good portion of it could also be maintenance outages. You can see from our maintenance outage calendar that much of the downtime is in October.
What happens a few weeks from now when most of those outages are over? Will lead times be close enough to Q1, typically a busier time of the year, to keep prices from slipping too much further? Could those outages be extended? Or could we have a sloppy year-end market, as we’ve seen in past years?
In the meantime, and despite those outages, steel buyers tell us that most mills remain willing to negotiate lower prices.
Another adage, at least in steel, is that you can’t get ahold of your mill representative when times are good. And that they’re calling you when the market is soft. We’re guessing there might be more catching up now than there was last year, when prices were (in the case of HR) exactly where they are now but on their way higher.
We tend to get a little obsessive about short-term trends. It’s hard not to when you’re polling the market every week.
But steel is about a lot more than that. And I think Steel Dynamics Inc. (SDI) deserves some credit for becoming the first steel producer to certify its decarbonization targets with the Global Steel Climate Council.
Those targets, which align with the Paris Agreement, stretch out as far as 2050. What I think is cool: The company is taking concrete action now – like a project to replace anthracite coal used in its EAFs with biocarbon.
Biocarbon is a fancy way of saying, for example, the bark and other trimmings left over from a timber mill. So, you know, doing what EAFs have long done – turning someone else’s waste into something very useful.
The first chart above is a sneak preview of results from our full steel market survey. We’ll release those to our premium subscribers on Friday.
Give us a shout at info@steelmarketupdate.com if you’re executive and you’d like to upgrade to premium. Premium gives you all the news and prices you get in executive, along with our proprietary data – not just the surveys but also useful stuff like service center shipments and inventories.
You can also ping us at info@steelmarketupdate.com if you’re active in the market and would like to participate in the survey. Your feedback helps us keep our finger on the pulse of the industry – especially when it moves in unexpected directions.
AZZ Inc., relatively unfazed by volatility in zinc pricing, is optimistic about demand prospects and M&A opportunities, especially in the galvanizing sector.
Executives from the Fort Worth, Texas-based company, which advertises itself as the largest independent hot-dip galvanizer in North America, discussed these topics and more on a conference call on Thursday.
The call was held to discuss financial results released on Wednesday, in which AZZ reported strong earnings in the first half of its fiscal year.
Executives said the company’s growth during its first half was “entirely organic.”
But, after taking some time off from M&A to focus on debt reduction, AZZ is back to actively exploring inorganic growth opportunities, especially in the galvanizing sector.
“We continue to evaluate bolt-on acquisitions to add inorganic growth in each” of its two segments, Metal Coating and Precoat, said Tom Ferguson, president and CEO.
“Within the galvanizing sector, we’ve got a lot of open space out there,” he commented.
AZZ is considering acquisitions in regions where it lacks a significant presence, with Ferguson mentioning the Northwest and Southeast US. It’s also interested in opportunities involving multi-site acquisitions and expects to be active if the right deals arise.
“On the galvanizing side, there’s pretty much nothing that’s off the table,” he noted.
Ferguson said the company is disciplined when it comes to taking market share. Noting its market share on the galvanizing side is ~35%, he said there is more opportunity on the Precoat side.
“We plan to remain patient while evaluating the best timing leverage and target valuations,” Ferguson added.
Recall that AZZ acquired Precoat Metals for $1.28 billion in 2022. The acquisition of the St. Louis, Mo.-based steel and aluminum coil coater added 13 manufacturing facilities, 15 coating lines, and 17 value-added processing lines to AZZ’s portfolio.
And that was just one of its purchases in a buying spree of coated metal companies that included Steel Creek Galvanizing, Acme Galvanizing, Tennessee Galvanizing, and others.
When asked about volatility in zinc prices, Ferguson noted that it tends to be easier for AZZ to raise its prices when zinc costs are fluctuating. While zinc costs could present headwinds in the future, he said there may also be opportunities to raise prices, especially as demand from hurricane recovery efforts picks up.
As rescue and recovery are still the focus in the areas recently ravaged by Hurricanes Helene and Milton, he said there will likely be a three- to six-month lag time on rebuilding work. Plenty of fabrication work will be available as those areas begin to rebuild the bridges, highways, signages, towers, and poles destroyed by the storms.
And with plenty of capacity available, “We stand ready to support the recovery and rebuilding efforts,” he said.
Looking ahead, AZZ expects weaker results in the second half of its fiscal 2025 year due to the construction sector’s normal seasonal slowdown, winter weather in general, and the holiday season.
The company believes the Fed’s recent loosening of monetary policy will spur spending growth in the consumer and private sectors.
It remains optimistic about upcoming opportunities, particularly in data centers and electrical transmission.
Other general trends Ferguson noted that will continue to benefit AZZ include the “reshoring of manufacturing, the migration to aluminum and prepainted steel, as well as the conversion from plastics to aluminum in the container space.”
Steel mill lead times inched up this week for most sheet and plate products, according to buyers responding to our latest market survey. Compared to late-September, lead times have marginally extended for all products other than galvanized. Overall, lead times remain near some of the shortest levels witnessed this year.
Production times are mixed this week compared to those seen one month prior, but higher for all products vs. levels three months ago. For sheet products, lead times for hot-rolled steel remain around five weeks on average and tandem products are all hovering around seven weeks. Plate lead times continue to register about four weeks, around where they have been since mid-July.
Table 1 below summarizes current lead times and recent trends.
Compared to our Sept. 25 market check, the upper and lower limits for some of our lead time ranges this week have changed:
Just over half of the companies we surveyed this week believe lead times will be flat two months from now, down from 67% in our prior survey. A third expected production times to extend further (up from 20% in late-Sept.). The small remainder (9%) believe lead times will shrink further (vs. 13% two weeks prior).
We also asked buyers how they classify current mill production times. The majority continue to respond that they are either shorter than normal (47%) or within typical levels (44%). A small portion of buyers said lead times are slightly longer than normal (9%).
“Domestic lead times have started to slip. We expect that to continue due to poor demand across the board.”
“Normal cyclical curve for the steel market. Mill outages in December will push out lead times.”
“I think once the presidential election is decided, people/businesses will have some direction and business will pick up a bit.”
“In the next 30 days, they go down and then stabilize as buying picks up.”
“I expect a lead time push because of a rebound of steel demand.”
Figure 1 below tracks lead times for each product over the past two years.
One way to smooth out the variability seen in our biweekly readings and better highlight trends is to view lead time data on a three-month moving average (3MMA) basis. Through Oct. 9, 3MMA lead times increased ever-so-slightly on sheet products and marginally eased on plate products.
On a 3MMA basis, sheet lead times have begun to flatten out in recent months, while plate lead times continue to shrink. Generally all 3MMA lead times have trended downwards since February and remain at some of the shortest levels seen in the past year.
The hot rolled 3MMA is now at 4.82 weeks, cold rolled at 6.69 weeks, galvanized at 7.04 weeks, Galvalume at 7.13 weeks, and plate at 4.15 weeks.
Figure 2 highlights lead time movements across the past four years.
US hot-rolled (HR) coil prices slipped this past week but remain marginally higher than offshore material on a landed basis.
Since reaching parity with import prices in late August, domestic prices had been slowly pulling ahead of imports. But with stateside and offshore prices largely edging down this week, the US premium was squeezed a bit.
SMU’s check of the market on Tuesday, Oct. 8, put average domestic HR tags at $695 per short ton (st), down $10/st from last week. US hot band did rebound from July’s 20-month low, but prices have fluctuated, with average prices increasing just $60/st over the past two-and-a-half months.
Domestic HR is now theoretically 46% more expensive than imported material. That’s lower than last week’s reading of 5.8%. While the gains have been negligible at times, prices are still up from late July, when stateside products were ~12% cheaper than imported HR.
In dollar-per-ton terms, US HR is now, on average, $32/st more expensive than offshore product (see Figure 1), compared to $41/st more costly last week. Prices are still up $104/st from late July when US tags were ~$72/st cheaper than offshore material.
The charts below compare HR prices in the US, Germany, Italy, and Asia. The left-hand side highlights prices over the last two years. The right-hand side zooms in to show more recent trends.
This is how SMU calculates the theoretical spread between domestic HR coil prices (FOB domestic mills) and foreign HR coil prices (delivered to US ports): We compare SMU’s weekly US HR assessment to the CRU HR weekly indices for Germany, Italy, and East and Southeast Asian ports. This is only a theoretical calculation. Import costs can vary greatly, and that can influence the true market spread.
We add $90/st to all foreign prices as a rough means of accounting for freight costs, handling, and trader margin. This gives us an approximate CIF US ports price to compare to the SMU domestic HR coil price. Buyers should use our $90/st figure as a benchmark and adjust up or down based on their own shipping and handling costs. If you import steel and want to share your thoughts on these costs, please get in touch with the author at david@steelmarketupdate.com.
As of Thursday, Oct. 10, the CRU Asian HRC price was $484/st, a $12/st increase vs. the week prior. Adding a 25% tariff and $90/st in estimated import costs, the delivered price of Asian HRC to the US is approximately $696/st. As noted above, the latest SMU US HR price is $695/st on average.
The result: US-produced HR is theoretically about even, just $1/st cheaper than steel imported from Asia. That’s a $26/st decline from last week because prices in Asia edge up while domestic tags slipped. Still, it’s a far cry from late December, when US HR was $281/st more expensive than Asian products.
Italian HR prices declined $10/st to $550/st this week. After adding import costs, the delivered price of Italian HR is, in theory, $640/st.
That means domestic HR coil is still theoretically $55/st more expensive than imports from Italy. That’s flat week over week (w/w) as both markets diverged by $10/st. Recall that US HR was $297/st more costly than Italian hot band just five months ago.
CRU’s German HR price moved down $9/st to $563/st. After adding import costs, the delivered price of German HR coil is, in theory, $653/st.
The result: Domestic HR is theoretically $42/st more expensive than product imported from Germany. Stateside hot band was at an $18/st discount just a month ago. At points in 2023, in contrast, US HR was as much as $265/st more expensive than imported German hot band.
European automaker Stellantis is mulling a major management shakeup following the company’s recently lowered 2024 guidance, according to a Bloomberg report. This comes amid a spate of layoffs in the last few months at Stellantis, which has significant operations in the US, and at General Motors.
In its adjusted guidance at the end of last month, Stellantis cited a soft North American market and weakening industry dynamics worldwide.
Stellantis CEO Carlos Tavares said he could present his proposal at a board meeting scheduled in the US this week, according to the Bloomberg article.
A spokeswoman for Stellantis said the company declined to comment on the Bloomberg story.
The news comes amid layoffs that have occurred at both Stellantis and GM in the last few months.
A report in the Detroit Free Press on Sept. 24 said Stellantis is planning indefinite layoffs of union-represented workers “across its footprint.”
When asked by SMU about these layoffs, the spokeswoman said the company will continue to take “the necessary actions to improve operations across our facilities.”
She noted that Stellantis is in “full implementation mode” to protect the company from “intense” external market conditions. At the same time, the focus is also still on “offering customers vehicles they can afford.”
This includes ongoing assessments to improve manufacturing efficiency.
“While that effort continues, the company will be implementing indefinite layoffs of represented employees across its footprint,” she added.
A survey of WARN notices issued in several Rust Belt and Midwestern states yielded the following layoffs at Stellantis and GM facilities.
At its Warren, Mich., Truck Assembly Plant, Stellantis said in a WARN notice on Aug. 9 that it was laying off 1,200 workers. The plant makes the Jeep Wagoneer and Wagoneer L, Grand Wagoneer and Grand Wagoneer L, and Ram 1500 Classic. A report from Fox 2 Detroit said nearly 2,500 jobs have been cut from the plant.
GM also said in late August it would lay off 634 workers in Warren. A report in the Detroit Free Press said the cuts were at GM’s Global Technical Center.
At GM’s’ Fairfax, Kan., Assembly and Stamping Plant, 1,695 layoffs were announced via WARN on Sept. 19. The plant has 2,275 employees and makes mid-size models such as the Cadillac XT4 and Chevrolet Malibu.
The majority of steel buyers continue to report that mills are willing to talk price on new orders, according to our latest market survey. Negotiation rates have consistently been in the 70-80% range for over two months, relatively strong in comparison to levels seen across the past year
SMU polls hundreds of steel market executives every other week asking if domestic mills are willing to negotiate lower spot pricing on new orders. As shown in Figure 1, 78% of all buyers we surveyed this week reported that mills were flexible on price. This is now the highest negotiation rate recorded since late July, having ticked higher each of the last four weeks.
As seen in Figure 2, negotiation rates differ across our various sheet and plate products, ranging from 63-92%. Negotiation rates were highest for coated and hot-rolled products. The biggest movers from our prior survey were plate and hot rolled. Negotiation rates by product are:
“[Hot rolled] depends on the mill, more tons can achieve some type of quantity discount, but less discount available than previous weeks.”
“I think eventually [galvanized] prices trend up with less import being booked, but still seems to be the one product mills are willing to chase.”
“It is going to take a lot of steel to rebuild and repair what has been damaged by hurricane Helene and Milton. [Plate] prices are not going down anytime soon. I would not be surprised to see an $80-$100/ton increase on discrete plate.”
“Depends on the [plate] tonnage.”
Note: SMU surveys active steel buyers every other week to gauge their steel suppliers’ willingness to negotiate new order prices. The results reflect current steel demand and changing spot pricing trends. Visit our website to see an interactive history of our steel mill negotiations data.
The building that was once the headquarters of AK Steel is again up for sale.
The four-story office building in West Chester, Ohio, just north of Cincinnati, was recently listed for sale for an undisclosed sum.
Built-to-suit for AK Steel in 2007, the building last sold in 2018 for $25 million, according to Zillow records.
At that time, AK Steel employed 2,400 full-time employees at its corporate headquarters in West Chester and at its Middletown Works plant, according to local media.
The lease transferred to AK Steel’s new owner, Cleveland-Cliffs, when the Cleveland-based company acquired AK in 2020 for $1.1 billion. Cliffs said it would maintain a significant presence at the West Chester location.
AK was and now Cliffs is the only tenant in the building. It signed an early lease extension, which is good through July 2029, according to the listing company Institutional Property Advisors.
It is unclear how many workers Cliffs still employs at the location. The company did not respond to requests for comment.
Steel Dynamics Inc. (SDI) has become the world’s first steel producer with carbon targets certified by the Global Steel Climate Council (GSCC).
The Fort Wayne, Ind.-based steelmaker said the science-based, greenhouse gas (GHG) emissions-intensity targets and its 2022 base year data have also been verified by a third-party, global sustainability firm KERAMIDA Inc.
SDI set a 2050 emissions intensity target of 0.12 metric tons (mt) of CO2 e (“carbon dioxide equivalent”) per mt of hot-rolled steel produced. This is in alignment with the 1.5-degree Celsius scenario in the Paris Agreement adopted in 2015.
Additionally, the company set an interim 2030 emissions intensity target of 0.80 mt of CO2 e per mt of HR steel. This is a 15% reduction from the 2022 base year.
“Steel Dynamics is already a leader in producing lower-carbon steel products,” Mark D. Millett, SDI chairman and CEO, said in a statement on Thursday.
“Even though our emissions are already among the lowest in the industry, we are committed to further reducing our carbon impact and have an actionable path forward,” he added.
The company touted its investment of over $260 million in a biocarbon production facility in Columbus, Miss. Construction began there in 2023. It expects this will further decrease its Scope 1 emissions by as much as 35%.
Adina Renee Adler, executive director of the GSCC, praised SDI’s actions toward reducing its carbon footprint.
“Our certification recognizes Steel Dynamics for its leadership on decarbonization and taking a forward-leaning approach to continue cutting emissions across the company,” Adler said in a separate statement.
GSCC is a non-profit that leads efforts to reduce steel carbon emissions. Its members have a presence in 80+ countries around the world.
| Second quarter ended Aug. 31 | 2024 | 2023 | % Change |
|---|---|---|---|
| Net sales | $409.0 | $398.5 | 2.6% |
| Net income (loss) | $35.4 | $24.7 | 43.3% |
| Per diluted share | $1.18 | $0.97 | 21.6% |
| Six months ended Aug. 31 | |||
| Net sales | $822.2 | $789.4 | 5.2% |
| Net earnings (loss) | $(1.4) | $49.7 | (102.8)% |
| Per diluted share | $(0.05) | $1.95 | (102.6)% |
AZZ Inc. posted sharply higher second-quarter profits driven by increased sales and better demand for its products.
The Fort Worth, Texas-based hot-dipped galvanized and coil coater reported net income of $35.4 million in the second quarter of 2024, up 43.3% from $24.7 million in the same quarter last year. It posted Q2’24 sales of $409 million, up 2.6% from $398.5 million in Q2’23.
The gains were driven by “focused execution and seasonal strength,” AZZ President and CEO Tom Ferguson said in a statement released with earnings data after the close of markets on Wednesday.
“I want to thank all of our dedicated AZZ employees for their work this quarter on both sales volume and productivity improvements,” he added.
AZZ bills itself as North America’s largest hot-dipped galvanizer. It become so with its $1.28-billion acquisition of Precoat Metals in 2022.
The company has two business segments: Metal Coating and Precoat.
The Metal Coating segment recorded sales of $171.5 million in Q2’24, up 1% from Q2’23. AZZ said the gain came thanks to “slightly increased” volumes related to infrastructure spending, bridge and highway work, electricity transmission and distribution, and renewable energy.
Precoat posted sales of $237.5 million in Q2’24, up 3.8% from Q2’23. The increase resulted from higher sales volumes to construction, HVAC, and transportation, AZZ said.
On the cap-ex side, meanwhile, AZZ said it spent $32.1 million in Q2’24. Of that amount, the company earmarked $19.4 million for its new facility in Washington, Mo. The new plant remains on budget and on schedule, the company said.
Nucor said it would keep plate prices unchanged in a letter to customers on Wednesday.
The Charlotte, N.C.-based steelmaker also said it was opening its November order book for plate.
The company did not specify what its plate price was. It has officially kept prices flat since cutting them by $125 per short ton (st) on July 1.
SMU’s average price has fallen more than that. Our plate price now stands at $920/st on average as of Tuesday, down $200/st from $1,120/st in early July.
Some major domestic mills are offering plate prices as low as ~$860-880/st. And smaller regional players might be in the low $800s per ton, or not much higher than imports on a landed basis, market participants said.
Some also questioned Nucor’s plate price announcements. They cited the discrepancy between prices being officially flat even as tags have steadily eroded in the physical market.
SMU’s plate price is at its lowest point since $880/st in early January 2021, according to our pricing archives. They are also down nearly 53% from an all-time high of $1,940/st reached in the spring of 2022 following Russia’s full-scale invasion of Ukraine in the winter.
The war led to panic over pig iron supplies and the destruction of Azovstal Iron and Steel Works, previously an important supplier of plate and of slab to international markets – including the US.
After a complete stoppage earlier this year, ArcelorMittal Mexico’s steel mill in Lazaro Cardenas, in the state of Michoacán, will soon return to full production.
The company announced it previously restarted flat product production and will return to making long products on Oct. 16.
It noted that the mill’s capacity for manufacturing long products is 1.5 million metric tons per year (mtpy). The restart will help the company reach the mill’s total production capacity of 5.3 million mtpy.
“This milestone represents the company’s full return to the Mexican steel market, after a gradual reactivation process,” the company said in a statement translated from Spanish.
Recall that a labor strike earlier this year forced the mill to close for 55 days. The steelmaker and local mining union reached an agreement to end the work stoppage in July.
The mill on Mexico’s west coast operates one blast furnace for manufacturing long products, including bars and wire rod. It also has four electric-arc furnaces for making flat products.
In 2023, the mill produced 3.8 million mt of crude steel, with 2.8 million mt of flats and 1.0 million mt of longs.
Victor Cairo, CEO of ArcelorMittal Mexico, emphasized that resuming operations is important for both the company and the local economy.
“The restart of the plant in Michoacán not only marks the return to its maximum production capacity, but also contributes to the development of critical infrastructure for Mexico and the strengthening of the country’s industrial sector,” the company said.
Stelco Inc. said that the Canadian Competition Bureau will not challenge Cleveland-Cliffs’ pending buy of the Hamilton, Ontario-based steelmaker.
The issuance of a “no-action letter” by the Bureau means that the $2.5-billion deal, first announced in July, has cleared another antitrust hurdle, this time on the Canadian side of the border.
The companies anticipate the deal to close by the end of the year.
As previously reported, in the US, the deal’s waiting period for the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) expired on Oct. 8, clearing that antitrust obstacle. Additionally, the deal has the support of the United Steelworkers (USW) union. And, in September, Stelco shareholders voted to OK the transaction.
Lourenco Goncalves, Cliffs’ chairman, president, and CEO, noted that a third milestone for the deal was also achieved this week, as the company “successfully raised the remaining capital to fund the transaction.”
Stelco is an integrated steelmaker with operations in Hamilton and Nanticoke, Ontario.
It’s another week of big headlines for the world writ large – an expanding war in the Middle East, another potentially catastrophic hurricane – and not much going on in the world of steel prices.
“Call me Stevie Wonder, I see nothing.” That’s how one service center executive described the current sheet market. There seems to be almost a competition among some of our Community Chat guests and contributors to outdo each other in flowery ways to say, “Not much is happening.”
Sheet prices might go up or down slightly in any given week. They’re generally lower this week. But despite that dip, HR prices remain around $700 per short ton (st) on average – as has mostly been the case since August. Cold-rolled and coated prices have been $900-950/st on average over that same period, according to SMU’s pricing records.
One mill source told me today that, from his perspective, prices should continue to inch higher – especially in the wake of recent trade actions and potential future ones. “The game is turning all domestic on all products, little by little,” he said.
A second Midwest service center source said that the calendar might provide a lift to prices. He pointed out that Christmas and New Year’s fall on Wednesdays, which effectively takes two weeks out of the calendar instead of one.
Recall that last year, the holidays fell on Mondays. In 2022, they landed on Sundays. And in 2021, Saturdays. “With that and the Thanksgiving week, a 7-8 week lead time is quickly approaching 2025 production, which if we might ever see a bump in pricing, that could be it,” he said.
He was referencing cold-rolled and coated lead times. But at Steel Dynamics Inc. (SDI), according to lead times posted on Wednesday, HR is out that far at its Sinton, Texas, facility. And its operation in Columbus., Miss., is closed. That squares with some of you who’ve told me: You’re having trouble finding discounts from certain mills even if you have large tons to place. And some of those mills aren’t taking large orders.
It’s starting to sound pretty bullish, right?
And yet HR futures markets appeared to move lower on Tuesday on news that stimulus from Beijing might not be enough to turn China’s economic prospects around. That sent seaborne iron ore prices lower.
And, closer to home, we keep hearing variations on this theme: Election-related uncertainty is weighing on the market. Polls show it remains historically close, so it’s hard to see that uncertainty going away soon.
And concerns remain on the demand side. That first service center source, we’ll call him Mr. Wonder, said he thinks he could get prices in the low $600s from some of his domestic suppliers if he could cobble together a big enough buy. In the past, the price negotiation was more difficult than finding enough orders to justify a large purchase. Now the reverse is true, he said.
Another service center source said his company had 3.5 months’ supply of inventory on hand, more than he’d like to have – but less than some of his competitors. He pushed back against the idea that the calendar might help steel prices.
As he sees it, mills will be mostly past their maintenance outages by the end of October. That means more supply into the market during what is typically one of the weakest times of the year. And he questioned how active the spot market was at current prices, especially if buyers can mostly tide themselves over with contract tons.
A steel buyer on the plate side, meanwhile, said it’s still tough to find and retain skilled workers – as it was in 2021. But it’s not so much of a struggle to find competitively priced plate, especially with prices at their lowest levels since then.
Some major North American plate mills are in the $800s/st, which makes imports from South Korea and Brazil in the high $700s/st not very competitive. But while prices might finally be manageable, demand is only a fraction of what it had been, he said.
The plate buyer pointed to lead times as short as 2-3 weeks among EAF mills. And among his customers, “I don’t know many who are doing well, doing overtime, or putting on more shifts,” he said.
He pinned that partly on big projects – like offshore wind – not coming to fruition. And partly on high steel prices in the US driving downstream work aboard.
So, which is it: Could prices and demand inflect higher as lead times stretch closer to 2025? Or will prices slip as maintenance outages conclude, on a weaker global economy, and on questions about demand?
I could hazard a guess. But it would be just that. So let us know what you’re seeing in the market.
One of the best ways to do that is by participating in our steel market surveys. So ping us if you’d like to at info@steelmarketupdate.com.
And in the meantime, thanks to all of you for your continued business. We really do appreciate it.
Steel sheet and plate prices moved lower this week as efforts by some mills to hold the line on tags ran up against continued concerns about demand.
SMU’s hot-rolled coil price now stands at $695 per short ton (st) on average. That’s down $10 from last week but still within the narrow range of average prices ($685-705 st) we’ve seen since late August, according to SMU’s interactive pricing tool.
How did we arrive at that number?
Certain larger mills are trying to stick to numbers around Nucor’s published price of $730/st. And some of those mills sport lead times into mid-November or even early December once you factor in Thanksgiving, market participants said.
But some smaller mills, as well as certain northern mills, remain willing to sell in the mid/high $600s/st given a more competitive market. And certain larger buyers speculated that they could get prices in the low $600s/st should they return to the market.
It was a similar story across cold-rolled (CR) and coated products. SMU’s CR price fell $20/st to $940/st on average. Galvanized base prices dropped $25/st to $920/st on average. And Galvalume prices were unchanged at $940/st.
Despite the week-over-week declines in CR and galv, both remained within the $900-960/st range they’ve been in since mid-August.
Market sentiment was decidedly weaker on plate, where SMU’s average price fell $20/st to $920/st on average. We haven’t seen plate prices that low since early January 2021. And several buyer sources said major plate mills were selling well below $900/st despite list prices as high as $1,075/st.
SMU’s price momentum indicator remains neutral for sheet products until a clear trend emerges. And our plate momentum indicator continues to point lower.
The SMU price range is $660-730/st, averaging $695/st FOB mill, east of the Rockies. The lower end of our range is down $20/st w/w, while the top end is unchanged. Our overall average is down $10/st. Our price momentum indicator for hot-rolled steel remains at neutral until the market establishes a clear direction.
Hot rolled lead times range from 3-6 weeks, averaging 4.9 weeks as of our Sept. 25 market survey. We will update lead times this Thursday.
The SMU price range is $900–980/st, averaging $940/st FOB mill, east of the Rockies. The low and high ends of our range are both down by $20/st w/w, as is our overall average. Our price momentum indicator for cold-rolled steel will remain at neutral until the market establishes a clear direction.
Cold rolled lead times range from 5-9 weeks, averaging 6.9 weeks through our Sept. 25 survey.
The SMU price range is $880–960/st, averaging $920/st FOB mill, east of the Rockies. The lower end of our range is down $20/st w/w, and the top end is down $30/st. Our overall average is down $25/st from last week. Our price momentum indicator for galvanized steel remains at neutral until the market establishes a clear direction.
Galvanized .060” G90 benchmark: SMU price range is $977–1,057/st, averaging $1,017/st FOB mill, east of the Rockies.
Galvanized lead times range from 5-9 weeks, averaging 7.3 weeks through our last survey.
The SMU price range is unchanged for a third week at $900–980/st, averaging $940/st FOB mill, east of the Rockies. Our range is unchanged w/w. Our price momentum indicator for Galvalume steel remains at neutral until the market establishes a clear direction.
Galvalume .0142” AZ50, grade 80 benchmark: SMU price range is $1,194–1,274/st, averaging $1,234/st FOB mill, east of the Rockies.
Galvalume lead times range from 6-9 weeks, averaging 7.3 weeks through our latest survey.
The SMU price range is $860–980/st, averaging $920/st FOB mill. The lower end of our range is down $40/st w/w, while the top end is unchanged. Our overall average is down $20/st w/w. Our price momentum indicator for plate remains at lower, meaning we expect prices to decline over the next 30 days.
Plate lead times range from 2-6 weeks, averaging 4.0 weeks through our latest survey. Look for updated lead times on Thursday.
SMU note: Above is a graphic showing our hot rolled, cold rolled, galvanized, Galvalume, and plate price history. This data is also available here on our website with our interactive pricing tool. If you need help navigating the website or need to know your login information, contact us at info@steelmarketupdate.com.
Worthington Enterprises has named Joseph Hayek as the company’s next president and CEO, effective Nov. 1. He will replace Andy Rose, who is retiring.
Hayek has served as the Columbus, Ohio-based company’s EVP and chief financial and operations officer since December 2023.
Recall that Worthington Industries split into two standalone, public companies on Dec. 1 of last year: Worthington Enterprises and Worthington Steel. Worthington Enterprises focuses on building products, consumer products, and sustainable energy solutions. Meanwhile, Worthington Steel specializes in steel processing, electrical steel lamination, and tailor welding.
Before the split, Hayek served as Worthington Industries’ VP and CFO from November 2018 to November 2023.
“We expect a seamless and effective transition as Joe has earned the respect of the board, our employees and the investment community,” Worthington Enterprises Chairman of the Board John Blystone said in a statement on Tuesday.
Regarding Rose’s retirement, Blystone said: “On behalf of the board, I would like to thank Andy for his contributions to Worthington over his 16 years with the company and four years as CEO.”
“I would particularly like to recognize the role he played successfully leading the team that separated Worthington Industries into two independent public companies,” he added.
At the same time, Worthington Enterprises announced Colin Souza will become VP and CFO of the company, also effective Nov. 1. He is currently VP of finance, overseeing financial planning and analysis, corporate development, M&A, and corporate strategy and innovation.
Domestic steel shipments increased month over month in August but slipped year over year.
Steel mills in the US shipped 7,292,562 short tons (st) in August, up 1.8% from 7,160,731 the previous month. However, that marked a 3.8% decline from 7,580,767 st in August 2023.
Year-to-date (YTD) shipments through August stood at 58,212,974 st, down 3.9% from 60,564,059 st for the first eight months of last year.
Comparing YTD 2024 shipments to same period last year shows the following: cold-rolled sheet, up 4%; corrosion-resistant steel, down 2%; and hot-rolled steel, off 5%.
Richard Fruehauf, formerly of U.S. Steel, has been named chief venture officer of robotics and AI firm Carnegie Foundry.
Fruehauf most recently served as senior vice president and chief strategy and sustainability officer of Pittsburgh-based U.S. Steel.
As previously reported, he left the steelmaker in June.
In his new role, Fruehauf will focus on securing key partnerships and investments to support new ventures.
“Having worked with Carnegie Foundry during my tenure at U.S. Steel, I was deeply impressed by its unique capability to deliver a continuous flow of significant innovations,” Fruehauf said in a statement on Monday.
“I am excited to now play a direct role in helping to bring pioneering IP to market,” he added.
Pittsburgh-based Carnegie Foundry said decarbonization and sustainability are among the key areas the company is targeting for future market entry.
The US has banned imports from a subsidiary of the world’s largest steelmaker because it allegedly uses forced labor to produce steel products.
The US Department of Homeland Security (DHS) has added Baowu Group Xinjiang Bayi Iron and Steel Co. (Xinjiang Bayi) to its Uyghur Forced Labor Prevention Act (UFLPA) Entity List.
Xinjiang Bayi, which produces hot-rolled coil, plate, and rebar, is located in Ürümqi, Xinjiang, China. It was acquired by the Baosteel Group in 2007. When Baosteel merged with Wuhan Iron and Steel in 2016, it became China Baowu Steel Group. The group is now the largest steelmaker in the world, producing over 130 million metric tons in 2023.
The UFLPA, in place since December 2021, prohibits the importation of goods mined, produced, or manufactured wholly or in part with forced labor in the Xinjiang Uyghur Autonomous Region (XUAR) of the People’s Republic of China.
“The United States government has reasonable cause to believe, based on specific and articulable information, that Xinjiang Bayi works with the government of the XUAR to recruit, transport, transfer, harbor, or receive Uyghurs, Kazakhs, Kyrgyz, or members of other persecuted groups out of the Xinjiang Uyghur Autonomous Region,” DHS said in a statement on Oct. 2.
The UFLPA list now includes 75 entities, mainly in the chemicals, apparel/textiles, and agricultural sectors. Xinjiang Bayi is the first steel company added to it.
DHS cautioned US importers to conduct due diligence and research their supply chains to determine any risks of forced labor.
“No sector is off-limits,” warned DHS Under Secretary for Policy Robert Silvers.
Customs and Border Protection (CBP) will deny entry to any goods or their components believed to be produced by these entities.
SMU received a tip earlier this year that a vessel carrying ~20,000 tons of Chinese tin plate was denied entry at a US port because it was unable to certify that the product was not made with forced labor. We were unable to confirm that rumor.
Iron ore prices spiked as the Chinese market reopened after the country’s seven-day holiday, but the rally started to lose steam on Tuesday afternoon. The iron ore price closed at $106.5 per dry metric ton (dmt) today, which is $2.0/dmt lower than the closing price before the holiday.
Iron ore supply has remained ample after strong shipments in September. Australian supply declined somewhat in the first week of October, but this is expected for the first week of Q4 as producers are carrying out maintenance after sustaining robust shipments since mid-August. Indian exports have been subdued during China’s holiday period and will be restricted by post-monsoon restocking activity in the domestic market in October. Ukrainian producer Ferrexpo released its Q3 results, showing a 16% quarter-over-quarter (q/q) decline in total production under challenging environment of high costs including electricity, freight, and additional war risk insurance premiums. In Brazil, iron ore exports were very strong in September at 36.9 million metric tons (mt), up by 2.6 million mt month over month (m/m) and 1.3 million mt year over year (y/y). Low-grade exports remained high as many small producers in Minas Gerais make one final push before the wet season starts. We also see an increasing proportion of Brazilian ore being shipped to China. Our data shows that arrivals of Brazilian ore to the Chinese market will reach a new all-time high in the coming months.
Rising Chinese steel and iron ore prices before the holiday sent positive signals to steel producers. Besides the announced monetary measures, there are rumors regarding strong fiscal stimulus, which is believed to be more effective in supporting steel demand and exacerbated the upward price reaction. Hot metal production responded quickly and edged higher even during the quiet holiday period. A contact commented that government-imposed production cuts are very unlikely as pollution control needs to give way to employment. Steel demand is yet to show any concrete change on the first day of market reopening, and the weak steel market in other parts of the world, combined with the absence of new stimulus measures on Tuesday, have made traders more cautious about the iron ore price direction in the coming weeks.
The current price level cannot sustain as optimism will fade away and demand/supply fundamentals are not supportive. We expect iron ore prices to hold steady in the coming week. The market is still looking for a direction and the stimulus hopes will still linger, while the strong supply and weak demand mean we are poised for a correction later in the month.
NOTE: There are two price assessments for iron ore and coal displayed on this page, both sets of prices are published weekly each Tuesday. The assessments in the column on the right represent the average of market prices over the past week and are available in online tables, workbooks and Data Lab. The assessments in the dashboard below include only price information for Tuesday up to market close in Asia and are only available in this dashboard.
Editor’s note: This article was first published by CRU. To learn more about CRU’s services, click here.
Cleveland-Cliffs has cleared a regulatory hurdle for its pending purchase of Canadian steelmaker Stelco Inc.
The waiting period for the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) has expired for the deal.
“The expiration of the HSR Act waiting period clears an important regulatory hurdle and marks a significant step toward the closing of this acquisition,” the company said in a statement on Tuesday.
The HSR Act requires that companies file premerger notifications with the Federal Trade Commission (FTC) and the Antitrust Division of the Justice Department for certain acquisitions, according to the FTC website.
The Cleveland-based steelmaker said the deal is expected to close in Q4’24 following the satisfaction or waiver of other customary closing conditions and approvals.
“We are excited to secure this critical step in the process and move another step closer toward completing this transformative acquisition of Stelco,” Lourenco Goncalves, Cliffs’ chairman, president, and CEO, said.
Recall that Cliffs announced plans to acquire Stelco for $2.5 billion in July. The deal has the support of the United Steelworkers (USW) union. Additionally, in September, Stelco shareholders voted to OK the transaction.
Raw steel output from US mills has slipped for a fourth consecutive week, according to the latest figures released by the American Iron and Steel Institute (AISI). This marks a 20-month low for production.
Total US raw steel output was estimated at 1,606,000 short tons (st) in the week ending Oct. 5. This was off 2.4% from 1,646,000 st the previous week.
Production fell 4.6% compared to the same week last year when mill output totaled 1,684,000 st.
The mill capability utilization rate dropped to 72.3% vs. 74.1% the prior week and 73.8% a year earlier.
Year-to-date production stood at 67,818,000 st at a capability utilization rate of 76.6%. This was a 1.7% decline from the 69,009,000 st produced in the same time frame last year.
Weekly production by region is shown below, with the weekly changes noted in parentheses:
Editor’s note: The raw steel production tonnage provided in this report is estimated and should be used primarily to assess production trends. AISI’s monthly “AIS 7” report is available by subscription and provides a more detailed summary of domestic steel production.
Slowing growth in data center planning caused the Dodge Momentum Index (DMI) to pull back in September. The index’s decline followed five months of growth since hitting a two-year low in March.
Dodge Construction Network (DCN) reported a DMI of 208.6 in September, a 4.2% drop from 217.7 the month before. Despite a 5.2% improvement in institutional planning, commercial planning contracted 7.8%.
“A surge in data center activity drove much of the recent rapid growth in the DMI – so as planning for that sector moderated over the month, overall commercial planning fell back,” explained Sarah Martin, DCN’s associate director of forecasting.
On the commercial side, planning for warehouses, offices, and stores slowed. Hotel planning, meanwhile, has been accelerating over the past five months and expanded further in September. And while data centers continued to account for the bulk of large projects, their growth rate slowed, according to DCN.
Education, healthcare, and recreational projects drove the September expansion in institutional planning, while religious planning declined.
Despite the index’s monthly decline, Martin pointed out that it “remains at very robust levels.”
Compared to a year ago, September’s DMI was 21% higher, with the institutional segment rising 4% and the commercial segment surging 31%.
“By mid-2025, the Fed’s rate cuts should spur planning projects to reach groundbreaking more quickly – leading to stronger nonresidential activity as 2025 progresses,” Martin added.
The DMI tracks the value of nonresidential construction projects entering the planning stages and typically leads construction spending by about 12 months.
Nucor’s consumer spot price (CSP) for hot-rolled (HR) coil is unchanged this week at $730 per short ton (st).
This marks the third consecutive week the Charlotte, N.C-based steel maker has kept its spot HR price at $730/st. The weekly price is up just $20/st since the start of September. It’s up a more significant $80/st from a low of $650/st in July.
This week’s CSP from Nucor remains at the top of SMU’s current price range of $680-730/st for HR coil. The average HR price established in our Oct. 1 check of the market was $705/st. We will again update prices this Tuesday.
Nucor also told customers on Monday that it would maintain the $790/st CSP for HR purchased from its West Coast joint venture subsidiary, California Steel Industries (CSI).
Check out SMU’s mill price announcement calendar on our website to track this and other flat-rolled steel price notices.
Surprise, surprise. Forget Halloween; the trend this October is all around the unexpected. Known as the “October Surprise,” you never know what is in store for you in the month before a US presidential election. Still, if we pull the dial back date-wise a little bit, a familiar theme has been added to the mix: Kick the can.
You may remember this from such hits as The Global Arrangement on Sustainable Steel and Aluminum. The US and EU had a deadline of Oct. 31, 2023. One particular sticking point was the carbon border adjustment mechanism (CBAM) that goes into effect in Europe next year. It’s widely viewed as a non-starter in the US. What would happen? Who would bend?
Turns out no one. A compromise never came. Both sides merely extended their existing trade arrangements for 15 months. One thing of note for those expert in math calculations: 15 months after Oct. 31, 2023… is after the US presidential election.
Nippon Steel’s play for Pittsburgh-based U.S. Steel was first announced last December. Most people thought of it as a sure thing; at least, that was the general consensus. A US ally that already had investments here and a big pocketbook. It just made sense. What could go wrong?
Cleveland-Cliffs and the United Steelworkers (USW) union were against the deal almost from the start. Soon, notable politicians piled on. And then, current and former presidents (Joe Biden and Donald Trump, respectively) joined the fray. And when Biden said he wouldn’t run for re-election, Democratic nominee and current Vice President Kamala Harris said she opposed the buy.
The tension mounted. It seemed like it was fourth and goal, and the crowd was on its feet. At least we were here at SMU. How would it affect the country when people went to the polls?
Well, in this case, the decision was punted. Last month, it was reported that no decision would come before the election.
We all remember United Auto Workers (UAW) President Shawn Fain’s colorful language during the union’s strike last year. Apparently, he wasn’t fond of billionaires. International Longshoremen’s Association (ILA) President Harold J. Daggett took a look at Fain’s playbook and said: Hold my beer.
The ILA and the United States Maritime Alliance (USMX) were locked in contract negotiations that affected thousands of workers along the East and Gulf Coasts. The deadline was Oct. 1.
In an interview in September, Daggett promised that a strike would “cripple” the US economy. His language on other matters was colorful as well. And there was an implicit promise of doom. I’m sure the incumbent administration wasn’t thrilled about such an event unfolding in the October surprise time frame.
A reprieve never came, though, and the strike went ahead on Monday. Supply-chain snarls? Would other unions, notably the Teamsters (also fond of colorful language), join in?
And then the strike ended on Thursday. That is, a tentative agreement was reached to extend the current contract until Jan. 15.
While that’s after the election, keep in mind that Inauguration Day is Jan. 20. I’m sure everything will be fine.
So, as this month unfolds, what other surprises could be in store for us? In an effort not to tempt fate, perhaps it’s best not to speculate. Still, let’s just hope the ultimate kick the can doesn’t take place.
I mean, they can’t suspend the election until after the election. Good logic must always prevail. Until Nov. 5, though, we’ll just be keeping an especially close eye on things, and carrying a rabbit’s foot.
On Thursday, the International Longshoremen’s Association (ILA) and the US Maritime Alliance (USMX), representing carriers and port operators on the East and Gulf Coasts, announced a three-and-a-half-month extension of the recently expired collective bargaining agreement.
The extension kicks the can down the road until Jan. 15, 2025, after the 2024 election and the certification of the results on Jan. 6.
The extension grants (at least temporarily) a $24-per-hour increase in income for ILA members. (Top pay would increase over six years to $63 per hour). But the issues that gave rise to the strike remain.
Longshoremen are very well paid. They work only part of the time because the number of longshoremen vastly exceeds the ports’ labor requirements. Average salaries before the strike were said to be about $150,000 per year, with much of that coming from overtime pay. Some longshoremen earn well above the average.
Not that I begrudge them that. They work hard. And they are under an increasing threat of losing jobs because of automation of the ports.
Longshore work is in transition because of automation. And it’s been that way for a long time. International shipping has been totally transformed in the last 60 years due to containerized shipping. One might assume that the huge increase in international trade over that period would add jobs, but it hasn’t. The reason—increasing mechanization of the handling of imported and exported goods.
The ports that were on strike for three days last week were primarily container ports, where longshoremen operate machines to hoist shipping containers on and off huge container ships. Goods that are not in containers (such as many types of steel and other metals) tend to arrive at ports that were not shut down by the strike. SMU reporter Laura Miller explained this in a recent article (Oct. 3).
When containers took over a large percentage of international commerce more than 50 years ago, the ILA tried to stem the loss of jobs by requiring shippers to empty the containers and then fill them up again at the ports. The picket signs at the ports from Oct. 1-3 brought back memories of the resistance to change all those years ago. The automation of ports, especially the screening of trucks and rail cars entering and exiting ports are a source of concern by the union. Some ports have installed digital scanning equipment that replaces manual inspection of containers.
Where you stand on issues like automation, of course, depends on where you sit. Issues are almost never as simple as they first appear. It may seem to some that replacing a human inspector with a digital scanner is simple progress. But an industry in transition needs to be careful that these changes don’t undermine the structure of a complex collective bargaining agreement.
The Wall Street Journal recently pointed this out by noting that there are many more dock workers than are needed. Many earn handsome salaries by not working much. That sounds wasteful—but the cities where they work need time to adjust to fewer workers on the job. The situation is similar to that of railway workers when steam locomotives were phased out in favor of diesel and electric. Many of the more modern engines had firemen on board for years after the steam engines were gone—even though the traditional job of a fireman was to shovel coal.
A protracted strike would have potentially impacted the 2024 election. President Biden declined to take action under the Taft-Hartley Act to end the strike with an 80-day “cooling off” period. But the extension of the contract and suspension of the strike had an almost identical effect.
Now that the strike has ended, the pressure is off. This is widely seen as benefiting Democrats. We’ll see.
Many issues are more complex than they appear at first glance. For example, I read with interest Barry Zekelman’s article responding to my column last month about electrical conduit from Mexico. It’s true that there is a controversy about the correct tariff classification of certain conduit.
The Court of International Trade decided that one importer’s classification was incorrect. It happened that the classification that importer chose was not covered by the Section 232 tariffs, while the classification that the court ruled to be correct is covered by the Section 232 tariffs.
Of course, no imports of product from Mexico are taxed under Section 232. Requiring the subject classification would put more product from Mexico into the “potentially taxed” category, if certain steel interests succeed in re-imposing tariffs on Mexican steel imports.
The issue remains: Should Mexican steel imports be hit with tariffs? The “surge” in imports of Mexican conduit is pretty minor, even considering the dispute about which tariff classification is correct. It’s fair to say that at least one side thinks the controversy over the right tariff classification is a legitimate disagreement about interpreting the tariff schedule. A decision is expected in the next few months out of the Court of Appeals for the Federal Circuit.
The price gap between US-produced cold-rolled (CR) coil and offshore products narrowed slightly in the week ended Oct. 4, mainly due to a price jump in Asian markets.
Domestic CR coil tags remain higher than offshore prices on a landed basis. US prices recovered week on week (w/w), while movements in offshore tags were mixed.
US CR coil prices averaged $960 per short ton (st) in our check of the market on Tuesday, Oct. 2, up $15/st vs. the prior week. Despite some improvement as of late, CR tags are still down roughly $365/st from the year-to-date high of $1,325/st in January.
Domestic CR prices are, theoretically, 23% more expensive than imports. That’s down from 24.6% last week and 31.5% in early January.
In dollar-per-ton terms, US CR is now, on average, $176/st more expensive than offshore products (see Figure 1). That’s down $3/st from last week and is still well below a recent peak of $311/st in mid-January.
The charts below compare CR coil prices in the US, Germany, Italy, South Korea, and Japan. The left-hand side shows prices over the last two years. The right-hand side zooms in to highlight more recent trends.
This is how SMU calculates the theoretical spread between domestic CR prices (FOB domestic mills) and foreign CR prices (delivered to US ports): We compare SMU’s US CR weekly index to the CRU CR weekly indices for Germany, Italy, and East Asia (Japan and South Korea). This is only a theoretical calculation. Import costs can vary greatly, influencing the true market spread.
We add $90/st to all foreign prices as a rough means of accounting for freight costs, handling, and trader margin. This gives us an approximate CIF US ports price to compare to the SMU domestic CR price. Buyers should use our $90/st figure as a benchmark and adjust up or down based on their own shipping and handling costs. (Editor’s note: If you import steel and want to share your thoughts on these costs, please get in touch with the author at david@steelmarketupdate.com.)
As of Thursday, Oct. 3, the CRU Asian CR price was $535/st, up $36/st w/w and ~$27/st higher than a month ago. Adding a 71% antidumping duty (Japan, theoretical) and $90/st in estimated import costs, the delivered price to the US is $1,005/st. The theoretical price of South Korean CR exports to the US is $625/st.
As noted above, the latest SMU CR price is $960/st on average, which puts US-produced CR theoretically $45/st below CR product imported from Japan and $335/st above CR imported from South Korea.
Italian CR prices were down $14/st to ~$660/st this week. After adding import costs, the price of Italian CR delivered to the US is, in theory, $750/st.
That means domestic CR is theoretically $210/st more expensive than CR coil imported from Italy. The spread is up $29/st from last week but is still $243/st below a recent high of $453/st mid-December.
CRU’s German CR price was down $14/st vs. the previous week. After adding import costs, the delivered price of German CR is, in theory, $756/st.
The result: Domestic CR is theoretically $204/st more expensive than CR imported from Germany. The spread is up $29/st w/w and still well below a recent high of $428/st in the first week of 2024.
General Motors is temporarily stopping production at a plant in Michigan and one in Texas due to supply-chain fallout from Hurricane Helene.
“Production at Flint Assembly (in Mich.) is cancelled for all shifts on Oct. 4, and Arlington Assembly (in Texas) is canceled for all shifts on Oct. 4 and 7 because of impacts to suppliers as a result of Hurricane Helene,” a spokeswoman for GM said in a statement to SMU.
“We are working with these suppliers to resume operations as quickly and safely as possible for their employees and communities, as we seek to minimize impacts on our plants,” she added.
Flint Assembly has 4,617 employees and manufactures heavy-duty crew and regular cab trucks. These include the Chevrolet Silverado HD and the GMC Sierra HD Denali and Sierra HD.
Arlington Assembly has 5,410 employees and builds full-size SUVs such as the Chevrolet Tahoe and Suburban, GMC Yukon and Yukon XL, as well as the Cadillac Escalade and Escalade-V.
Hurricane Helene made landfall in Florida on Sept. 26 and sowed damage across the Southeast, with western North Carolina particularly hard hit. The death toll has topped 200, according to a story in USA Today.
UPDATE: On Monday, Oct. 7, GM sent the following statement to SMU: “After a brief pause in production at GM’s Flint and Arlington assembly plants due to supplier-related issues in the aftermath of Hurricane Helene, production will resume at both plants.”
The automaker said Flint has already resumed operation, while Arlington will resume Monday evening on third shift.
“Our teams are confident we can make up any lost production over the coming days and weeks,” GM added.
China is challenging Canada’s decision to impose tariffs on imports of Chinese steel, aluminum, and electric vehicles.
The 25% tariffs on Chinese steel and aluminum, announced by the Canadian government in late August, won’t go into effect until Oct. 15.
But collection of the 100% tariffs on EVs began on Oct. 1.
China wasted no time in responding. On Wednesday, Oct. 2, China’s Ministry of Commerce announced its intentions to dispute the tariffs at the World Trade Organization (WTO).
“China has filed a lawsuit against Canada’s unilateralism and trade protectionism in the WTO and has launched an anti-discrimination investigation into Canada’s restrictive measures,” a Ministry spokesperson said.
“Canada should view bilateral economic and trade cooperation rationally and objectively, respect facts, abide by WTO rules, and not go further and further down the wrong path,” they added.
After Canada first announced the tariffs in late August, China retaliated by launching an antidumping investigation into its imports of canola oil from Canada.
“China’s antidumping investigation on canola imports from Canada is fundamentally different from the discriminatory measures taken by Canada in violation of WTO rules,” the Ministry spokesperson said. They added that AD cases are legitimate and WTO-compliant.
Canada has provided lists of the products covered under the new tariffs: The metals items can be found here, and the EV list can be found here.
The Canadian government noted that “the surtaxes will not apply to Chinese goods that are in transit to Canada on the day on which these surtaxes come into force.”
It said it would review the surtaxes a year after implementation to consider extending them or supplementing them with additional measures.
Canada’s steel industry had previously called for the alignment of tariffs with the US and welcomed the levies.
“With this tariff alignment with our CUSMA partners, the US and Mexico, we are protecting the North American trading space against China’s state-sponsored excess capacity and its destructive effects on our markets,” said Catherine Cobden, president and CEO of the Canadian Steel Producers Association (CSPA).
The tariffs “will align us with our largest trading partner and protect our highly integrated North American supply chains,” she added.
US drilling activity fell to a four-week low last week and remains near multi-year lows, according to the latest data released from Baker Hughes. Meanwhile, Canadian counts increased for the second consecutive week, now at one of the highest levels recorded in seven months.
Through Oct. 4, there were 585 drilling rigs operating in the US, two fewer than the week prior. Oil rigs counts were down five to 479, gas rigs rose by three to 102, and miscellaneous rigs were unchanged at four. There were 34 fewer active US rigs last week compared to the same week last year, with 18 fewer oil rigs and 16 fewer gas rigs.
There were 223 active Canadian drilling rigs as of last week, five more than the previous week and the highest count recorded since early March. Compared to the week prior, oil rigs rose by five to 157, gas rigs eased by two to 63, and miscellaneous rigs were up two to three.
There are currently 43 more Canadian rigs in operation than levels one year ago, with 49 more oil rigs, nine fewer gas rigs, and three more miscellaneous rigs.
The international rig count is a monthly figure updated at the beginning of each month. The total number of active rigs for the month of September rose to 947, up 16 from the August count and seven more than levels one year prior.
The Baker Hughes rig count is important to the steel industry because it is a leading indicator of demand for oil country tubular goods (OCTG), a key end market for steel sheet. A rotary rig rotates the drill pipe from the surface to either drill a new well or sidetrack an existing one. For a history of the US and Canadian rig counts, visit the rig count page on our website.
George Adams said he feels fortunate to be able to work with his kids at SA Recycling, the company his family founded.
But that’s not the case with many family-owned businesses.
Adams said he’s often asked by peers in the industry how to get their children interested in joining the company.
“At the end of the day, there’s nothing you can do to make your son want to go into the business,” Adams said during a panel discussion at the Recycled Materials Association’s Roundtable in Chicago recently. “They have to make that decision on their own. And I must say I was surprised when they told me they wanted to come into the business.
“When I was growing up, I didn’t really have a choice, because if you didn’t work you didn’t eat,” Adams laughed. As CEO of SA Recycling, he helms the California-headquartered company with his own siblings.
“So often money destroys a business, right? And I am very lucky that I had the support of my parents, my siblings, two who are still working with me in the company today, and now my sons, and my wife, who I met at the company.”
Fellow panelist, Frank Cozzi, CEO of Cozzi Recycling, said the secret to building any business is to have a good team around you.
“What better place to start and build a nucleus than within your own family, people you can trust and who have the same goals,” Cozzi said.
Cozzi Recycling began as a rag-and-junk business founded by the Cozzi family in 1945 in the Chicago area. It has since grown to be one of the largest scrap companies in the Midwest. Now headquartered in Bellwood, Ill., the company is a mill-direct supplier of both ferrous and nonferrous scrap metal.
Cozzi said the younger generation was familiar with the history of the company and the challenges it faced at different times.
“Trying to teach them not to make the same mistakes that we made, that’s been a challenge in some respects, but they have the work ethic and knowledge of the industry,” Cozzi said. “Many of my sons have been around the business now for 30 years. They’re pretty much what drives things today.”
Adams said he and his kids don’t always agree on what direction they should go. He noted how much they rely on technology to aid decision making.
“Business today is all data driven,” Adams said. “I’m 68 so I didn’t grow up with a computer. I didn’t have a cell phone until I was 30.
“You can’t run an organization as big as ours without data,” Adams said. “They have a huge advantage over me on that, but, at the end of the day, it’s going to be their company. So I don’t take it personal. Some fathers say it’s their way or the highway. It’s just not that way with me.”
Editor’s note: This column appeared first in Recycled Metals Update (RMU), SMU’s new sister publication. RMU is devoted entirely to the ferrous and nonferrous recycled metals markets. If you’d like to learn more, visit RMU’s homepage and register for a free 30-day trial.