The Material Report #012

The streak broke

For five months the most dependable fact in this report was that Nucor raised hot-rolled coil every Monday morning. Two Mondays ago it didn't. This past Monday it didn't either. The posted price has sat at $1,130 a ton since June 22, the first back-to-back hold since early January, after 23 straight weekly increases worth $380 a ton by SMU's count.

The input-cost picture cooled in the same window. ISM asks factory buyers every month whether they're paying more for materials. For nearly two years the answer kept getting louder, and in June it finally got quieter, the sharpest one-month cooldown in that survey since July 2022. Costs are still rising, 15 of 18 industries said so, but the pressure eased instead of building for the first time in a long time.

Now read what actually happened before celebrating. Nucor's own letter says demand is "strong and improving." It's holding the price "as we monitor import levels." In plain terms, order books are fine, but imported coil finally got cheap enough to compete at $1,130, and the mill paused rather than push buyers offshore. There's a number behind that: hot-rolled sheet imports more than doubled in May, to about 90,000 tons from roughly 40,000 in April. The tariff wall stopped working at these prices.

Everything else says the market is topping out, not rolling over. The average SMU tracks kept climbing to $1,160 while the posted price sat still. Buyers report actually paying $1,140~$1,150 a ton for spot orders, above Nucor's own number. Nucor told investors in mid-June it expects higher second-quarter earnings than the first. And last week was the July 4 holiday week, when scrap buying starts late and mills wait for clarity, so a pause was the easy call.

So this is a pause, and probably not a peak. But a pause changes your position more than it changes the price. For five months every steel negotiation ran one direction, and the only question was how much more. When the mill itself says it's watching imports, that's your card. Get an import quote even if you'd never live with the lead time, because a real offshore number on the table is the first leverage domestic buyers have had since January. What happens this coming Monday matters more than the last two weeks did: a third flat week in a normal working week is a signal, and another increase means the holiday explained it.

The ceasefire broke too

The other streak that ended was the quiet. On Tuesday, three tankers were attacked near the Strait of Hormuz, and Washington blamed Iran. The US hit more than 80 targets overnight, including over 60 Revolutionary Guard boats. On Wednesday, Trump declared the ceasefire over, called negotiating with Iran a waste of time, and threatened to reimpose the naval blockade. That night the US struck roughly 90 more targets, including Iran's main ocean-facing port, and Iran fired missiles and drones at US bases in Kuwait and Bahrain. The Treasury also canceled Iran's permission to sell oil, unwinding a key piece of the June deal.

Oil flipped direction immediately. Brent went from about $72 on Monday to settle at $78 on Wednesday, a 5% jump in a day, and it's trading around $77 this morning. That's still nowhere near the $126 wartime peak, but the premium that spent three weeks draining out is being rebuilt in real time.

Two things follow for your costs. First, the input-cost cooldown up top was mostly falling energy, so if the strait stays hot, some of it comes back in the July numbers. Diesel's slide to $4.58 a gallon, down more than a dollar from late May, was measured Monday, before the strikes, and probably stalls here. If cheaper fuel made it into a quote you're holding, don't assume it's still there when you re-quote in August. Second, the steel pause is unaffected. Nucor stopped because of imports, not Iran, and the war restarting doesn't restart the streak.

Two tariff decisions in the next two weeks

The copper decision is late, and that's not the same as dead. June 30 was the deadline for Commerce to hand the President its report on whether to put a tariff on refined copper itself, 15% in 2027 rising to 30% in 2028, on top of the 50% already on copper parts. The report went in. No decision has come out. Meanwhile US warehouses hold a record 650,000 tonnes of copper stockpiled in anticipation. Morgan Stanley puts the odds of the tariff at just under even, one big French bank thinks the decision gets kicked down the road, and Goldman thinks a yes sends copper to new records. If you buy copper, brass, or bronze, don't position on hope in either direction. The announcement, whenever it comes, will move prices the same morning.

The bigger date is July 24, when the 10% tariff on nearly all imports expires. This is the last issue before it does, so consider this the final reminder: the expiration is not relief. The replacement is being built under a different trade law with no cap on the rate and no end date, with rates of 10~12.5% proposed on dozens of countries and a decision due around July 20. If you import tooling, stock, or machinery, three things are worth doing this week. Pull forward anything already in the pipeline if lead times allow. Budget your imports at 12%, not zero. And if you buy from Canada or Mexico, ask your broker whether your USMCA paperwork carries over to the new tariff, because the old exemption doesn't transfer automatically.

Pricing notes

Steel sheet is covered up top. Plate didn't get the memo. SSAB's latest $40 a ton increase hits orders shipping August 2 and after, and SMU reported plate at $1,260 a ton with thin spot availability and long lead times still pushing prices up through the first week of July. Sheet paused, plate didn't, so if you buy plate, the pause up top is not your pause.

Copper sits around $6.15 a pound waiting on the decision above. Brass and bronze (C260, C360) held flat and share the same exposure.

Aluminum slid to nearly $3,000 a tonne before steadying around $3,100~$3,150. The base price fell, but availability didn't improve: warehouse stocks dropped below 300,000 tonnes for the first time since 2022, and while the big Abu Dhabi smelter restarted about 7% of its lines ahead of schedule, full recovery is still pointed at September or later. A cheaper index with tighter metal means quoted premiums stay stubborn, and a re-escalating war makes aluminum the first metal to snap back.

Stainless should get cheaper on the surcharge line. Nickel fell about 14% in June to a six-month low on talk that Indonesia will raise its mining quota, with that decision due late July. July surcharges should print below June's roughly $1.03 a pound on 304 and $1.78 on 316, so ask your service center for the July number before booking anything sizable.

Carbide: China's tungsten feedstock rolled over again, and this time it fell through the level it bounced off in May, back to where it started the year. European prices haven't followed and are still up around 240% on the year, which is what your tooling is priced against. This turn reversed on me once already, so I'm not calling relief. The tell is Kennametal's earnings in early August: if surcharges are easing, they'll have to say it out loud.

The metals AI is eating

One more thread worth knowing about even if you never buy these metals directly. Tin touched a record near $59,000 a tonne in early June and still sits around $50,000, up more than half in a year, and about half the world's tin becomes solder, the stuff holding every server board together. Copper is up 36% in a year partly on the same demand. The data center buildout that has flatbed trucks at record rates and machine-tool orders for turbine work doubling is also cornering the small metals inside the machines themselves, and analysts expect the squeeze to run toward 2028 because new mine supply can't ramp any faster. If your shop cuts parts for electronics, power gear, or anything server-adjacent, your customers' material problems are becoming your backlog.

What I'm watching

Monday's Nucor letter comes first, and it's the one that settles whether the last two weeks were a real pause or a long holiday weekend. Then the copper announcement, which could drop any morning, including the one you're reading this. July 20 is the deadline for the replacement-tariff decision, and July 24 is the expiration itself, the same day the next issue of this report lands. Late July brings Indonesia's nickel quota decision, which will set August stainless surcharges. Nucor reports earnings late this month and Kennametal in early August, the two calls most likely to say whether this pause is a plateau or a top.

One quieter number: June hiring came in around 57,000 jobs, about half what was expected, and markets stopped betting on a September rate hike. After months of costlier money stacked on costlier material, one of the two eased a notch.

If you've priced imported coil in the last two weeks, email me what it penciled out to against domestic, lead time and all. That's the number every steel buyer in the country is guessing at right now, and a few real quotes beat any index.

If your shop sends out more than 5 RFQs a week to material suppliers, I'm building a tool over at Material Price Book that pulls all the supplier quotes back into a single comparison view. Get in touch if you'd like to take a look.

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Eric Na writes The Material Report, a bi-weekly newsletter on metal pricing trends for machinists and shop owners.

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