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Email: Jeff.Lyons@atlasmfg.com
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May, 2021
Metal prices continue to reach unprecedented highs!
Steel prices continue to escalate, and material is in short supply. To understand why is complicated and involves supply and demand relationships that are complex. IN THE PAST WE RECEIVED MONTHLY PRICING from Ryerson and Viking Materials, our largest service center suppliers. NOW WE RECEIVE ONLY DAILY PRICING. Supply is tight, lead-times are long. Material pricing has doubled in the last 9 months!
Service centers convert steel coil material into sized flat blanks, which is what we purchase and convert into parts.
Atlas is a technical converter of steel, aluminum and stainless-steel flat sheet that shapes the metal behind your brand. Let’s go upstream for a ride. Mills such as Nucor, Steel Dynamics, Inc, US Steel, ClevelandCliffs, and ArcelorMittal are some of the United States producers that produce coil products that are sold to service centers.. There are also many foreign producers with China overshadowing all other countries as well.
The pandemic hit the steel industry hard in the spring of 2020 and steel consumption dropped rapidly to near 50% capacity utilization. There were massive layoffs and shutdowns to reduce capacity. Now demand has resurfaced without sufficient supply. The mills have increased pricing and extended lead-times to the service centers.
Service centers convert steel coil material into sized flat blanks, which is what we purchase and convert into parts.
Stainless: Why is the pricing so high and why do most service centers not have it? There is no foreign stainless to speak of. All the foreign mills want to sell in Asia and Europe to increase profits and cut down on freight costs. No containers to ship the material in at the docks is another issue. When Covid hit, foreign mills were shipping to anyone they could find to buy their product. That means they were shipping to destinations they had not previously been working with. The containers are now at those places with no recycling of containers. Foreign offers have dried up. Argon gas is needed for the 400 series material. That became in short supply during the ice storm in the South in Feb ’21. Still feeling the ripple effect of that. Mills do not want to produce 400 series due to processing time and profits. Hence, no material available. Allocations have been cut down the last couple of months by at least 15%. Covid outbreaks, raw material shortage and high costs all contribute to this. It is very tough right now. The mills do not think we will get out of this mess for most of 2021. Demand is very strong and doesn’t look to be softening anytime soon. Auto industry, appliance mfg, restaurant upgrades and conveyor systems (Amazon uses 304 for their conveyor systems. They may have grown a tad lately!) all contribute to higher demands.
Guidance from our leading service center: Secure metal and pricing before moving forward. Late inbound is the rule and not the exception to the rule.
Aluminum: Allocation still the rule and will be for most of 2021 it looks like. Pricing will rise based on ingot values rising. Prices will rise based on supply and demand as well which is up.
Carbon Steel: See below. No end in sight for carbon increases. They will continue as long as demand remains strong. No transactional tons to speak of in the market. Buyout material from brokers has dried up and remains extremely tight. Very tough on any new projects that might want to launch this year.
This week’s prices .. up again.
Hot Rolled Steel pricing has now increased for 40 consecutive weeks.
Bottom line is this, material pricing is escalating and while we do our absolute best to mitigate the material increase effects on your products, prices will ultimately need to reflect the base price increases we are experiencing.
Hot rolled > $ 1,541/ton = $ 77.05/cwt … up + $50/ ton, or up + $ 2.50 /cwt week over week.
Cold rolled > $ 1,719/ton = $ 85.95/cwt … up + $50/ ton, or up + $ 2.50 /cwt week over week.
Galvanized Steel > $ 1,819/ton = $ 90.95/cwt … up + $44/ ton, or up + $ 2.20 /cwt week over week.
With the ever-rising material pricing, please check with our sales team before placing any orders for products that Atlas has historically provided and ALWAYS ask for a refreshed quote prior to placing orders for new products.
