December Market Minute 2023

The Latest on Steel Prices

In the US metals market, recent months have seen a flurry of price increases announced by mills, culminating in current Hot Rolled (HR) spot prices reaching $1,100 per metric ton.

December witnessed a substantial surge in scrap prices, particularly in busheling, which rose by $80 per metric ton compared to the previous month.

Import volumes for November plummeted to a three-year low. However, lead times continue to be prolonged due to various production issues several mills face. Projections indicate extended lead times for different metals as outlined below:

More Nickel, Higher Stainless Prices

Current projections for January stainless steel surcharges are that they will decrease from their current levels (currently $0.92 and $1.39 for 304 and 316, respectively).

This trend continues to be driven by a surge in nickel supply, predominantly from Indonesia. Some estimates say this influx could potentially add 25-30% to the global nickel market within a year.

The continuous supply surge, unless tempered by a slowdown in Indonesian mining activity, is anticipated to persist, driving nickel prices downward.

Could Copper Prices Move Higher?

Attention Copper Buyers! Brace yourselves for a shift in the copper market! Recent developments in Panama have shaken the industry, with the government deeming First Quantum's Canadian copper mine operation unconstitutional.

This ruling has triggered a domino effect, shutting down a significant contributor—approximately 1%—to the world's copper supply. Brace for impact, as this disruption is already nudging copper prices upward.

Texas Manufacturing Tightens

In November, Texas factory activity contracted after two months of expansion, according to the Texas Manufacturing Outlook Survey published by the Dallas Fed. Key indicators, like the production index, dropped significantly by 12 points to -7.2, indicating a decline in state manufacturing conditions.

Multiple aspects of manufacturing activity showed contraction this month. The new orders index, negative for 18 months, fell to -20.5 from -8.8. Capacity utilization dropped to -10.1 from 5.4, and shipments fell by eight points to -9.5.

Broader business perceptions worsened, with the general business activity and company outlook indexes remaining in negative territory at -19.9 and -18.8, respectively, for over a year and a half. The outlook uncertainty index stayed slightly elevated at 20.3.

Regarding employment, there was slower growth and shorter workweeks in November. The employment index dipped to 5.0 from 6.7, below the series average. While 22% of firms reported net hiring, 17% reported net layoffs. The hours worked index registered a second negative reading, sliding three points to -5.5.

Season's Greetings and Warm Wishes to our Valued Customers!

As the year draws to a close, we want to express our heartfelt gratitude for your unwavering support and trust in our services.

Your partnership has been the cornerstone of our success, and we are truly grateful for the opportunity to serve you. Your trust in us motivates our team to strive for excellence in delivering top-quality steel products and exceptional service.

May this holiday season bring joy, peace, and cherished moments with your loved ones. We look forward to continued collaboration and growth in the upcoming year.

Please take a moment to watch this very special holiday greeting from our team!