Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

ArcerlorMittal, Nucor, Algoma, and SSAB announced price increases of $40/st ($44/mt) in the week ending Sept 11, 2020.  


The price reflects higher input costs and changing market dynamics, according to the Nucor Plate Group, and follows announcements by the same firms during the weeks ended August 21 and August 28.  


Buyers anticipated the late August announcements because of higher input prices, economic recovery, and influx of delayed orders from steel centers for October and November delivery. 


Flat-rolled mills announced price increases of $40-60/st in late August. The plate price announcement  should spark another price notice this month. 


Despite price announcements, higher-priced deals didn’t materialize until late August, but with US domestic scrap prices rising by $30-55/gt, depending on grade and region, early this month, buyers and sellers informed Davis Index that finished steel sales have increased and lead times extended. 


HRC prices are at ¢24.5-26/lb ($540-573/mt) fob mill, with eight-to-10-week lead times. Over the past week, prices increased by $10-11/mt and extended lead times by up to two weeks from seven to eight. 

Plate is presently at ¢28/lb ($617/mt) fob mill, unchanged from last week. After the late August price announcements, plate gained about $10/st on deals, while HRC rose by approximately $20/st on deals at the end of the month. The September price increase is expected to stabilize prices and provide an  additional $10/st support on higher input costs, but limited upside is expected until finished steel demand trends become more evident in the economy.  


CRC prices have been flat since early September at ¢34-36/lb ($749-793/mt) fob mill, with lead times of six to seven weeks—up by about two weeks compared to August, but shorter than HRC lead times. 


While strong scrap price increases this month are supporting finished steel prices, market participants doubt finished steel tags will rise and expect sideways or slightly increased ($10-20/gt)  pricing during the early October scrap trading week. The rush to replenish steel inventories after a delay period is reminiscent of late 2019, when orders contracted a month after fulfillment. However, some market participants noted the demand environment is different because the economy is reeling from the COVID-19 pandemic. 


Market participants pointed to tight scrap inventories and scrap yards not stockpiling this year—a marked difference compared to late last year. Additionally, a strong export environment is expected to continue and influence scrap prices in Q4 2020. 



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