August 15, 2023
August Market Minute 2023
Have Steel Prices Settled?
The price of hot-rolled coil has been hovering around the $800/ton mark for multiple weeks and down more than $200/ton since May 1.
Capacity levels have also begun to stabilize and are more in line with historical norms (see below). It is important to note that major consuming industries like auto, construction, and energy can significantly move the needle in either direction as they account for a significant amount of available capacity.
Checking in On Stainless Surcharges
Nickel prices have fallen lately, which could impact stainless surcharges in the month ahead. See below for the August surcharges and the estimated surcharge for September.
Manufacturing Activity: What Fabricators Are Saying
Manufacturing activity has slowed across the U.S., including Texas. On a more granular level, fabricated metal product manufacturing companies shared some of their biggest challenges moving forward.
According to the latest report from the Dallas Fed, Texas factory activity declined in July. The production index, a key measure of state manufacturing conditions, held steady at -4.8, a reading indicative of a modest contraction in output. Here are two comments of note from fabricated metal product manufacturers from the survey:
“We have the biggest backlog of projects ever. We are not able to expand due to the difficulty in hiring workers for the plant.”
Supply constraints are improving, but there are still some ongoing challenges.”
At a national level, the July Manufacturing PMI from the Institute for Supply Management registered 46.4%, 0.4 percentage points higher than the 46% recorded in June. This indicates an eighth month of contraction after 30 months of expansion. One comment of note from a survey respondent from the fabricated metal products market:
“Stable demand for the next four to six months, but longer-term uncertainty. While customer growth is projected, we cannot point to fundamentals that sustain it. Supply conditions are similar to pre-pandemic, except for energy and raw input costs. Logistics costs have settled, transit times continue to shorten, and capacities at most suppliers are sufficient.”
Can a “Sixth Man” Help in a Slowdown?
At SteelNow, we understand the critical relationship between time and success. You need to spend more time working on your business and less time looking for material, vetting suppliers, and handling claims.
Consider SteelNow an integral part of your business, an ally ready to step in and assist, like the impactful "sixth man" on an NBA team. We can assume the crucial role of the purchaser, ensuring you don't need to increase your payroll expenses.
“NBA teams have five starters, and they typically have someone who can come off the bench when one of their starters needs to rest or is in a slump, who is referred to as the ‘sixth man’—the person that is their go-to in tough times,” says Devon Owings SteelNow’s Business Development Analyst. “We feel that many of our customers need that go-to person for assistance when their back is against the wall, and that is where we step in.”
Listen to the complete discussion about “How the NBA’s Sixth Man Relates to Buying Steel” in the link below!