March Market Minute 2023

Steel Prices Up 60%

Since the beginning of the year, the price of steel sheet has jumped more than 60%. Rewind to November 2022, and there has been a total of $560/ton in increases from domestic steel mills.

Reduced import volumes, production delays at domestic mills, and higher production costs have all been contributing factors.

Another factor is the fact that capacity levels at domestic mills have been under 80% since June 2022. For the week ending on March 4, 2023, domestic raw steel utilization rate was 74.4%, according to the American Iron and Steel Institute. This is down from a 79.6% utilization rate in the same week last year.

In addition, multiple mills have planned outages scheduled for Q2, which could impact utilization rates even further.

Aluminum Duties Pose Little Threat

Beginning March 10, a 200% import duty on Russian aluminum articles and derivative products went into effect, per a presidential proclamation.

The tariff will also be applied to any U.S. imports of semi-finished products containing Russian primary aluminum. This includes things like flat rolled products, extrusions, wire/cable, and castings.

The U.S. will also apply this tariff on, “aluminum articles where any amount of primary aluminum used in the manufacture of the aluminum articles is smelted in Russia…” These indirect duties will become effective on April 10, 2023.

The good news is that, on average, the U.S. imports a very small percent of aluminum from Russia (roughly 4.4%). As a result, sanctions on Russian aluminum should not play a big role in the ability to source aluminum domestically.