The Material Report #018

This fortnight in 30 seconds

Secure delivery for committed steel jobs

For committed sheet and plate jobs, get price and a delivery date in writing now. Mill lead times are stretching. Ask whether your material is in stock or still waiting on mill production before relying on the quote. Cover firm needs; don't build extra inventory on price announcements.

Steel Market Update's (SMU) October 1 survey found longer mill lead times for sheet and plate. Nearly every product it measures is at a multi-year high dating back to 2021, and plate is at a record. These are mill production times, not delivery estimates for stock already at your distributor.

For stock on the floor, confirm the quantity available and when it can ship. For material still at the mill, ask what production date supports the promised delivery. A held price alone does not guarantee arrival before your job starts.

Nucor Tubular added $100 a short ton on new structural tube, mechanical tube and piling orders September 29. Its earlier September 9 increase was $80 a ton. Those notices total 9 cents/lb; your distributor's quote may differ.

SMU reports Nucor's posted hot-rolled coil price reached $1,230 a ton on October 5. Coil is the flat steel mills sell for processing into sheet. That Monday announcement falls after our benchmark's Sunday endpoint below.

For plate, SMU's October 2 report describes Nucor's October 1 plan to seek another $60 a ton on November orders. Its October 23 submission cutoff is for mill customers. Ask your distributor when it needs your PO; submitting an order does not guarantee acceptance or November delivery. SMU also reports SSAB seeks at least $60 more on new noncontract orders confirmed to ship from November 1.

There is still reason to negotiate. In SMU's October 1 survey, 11% of buyers said mills would discuss new sheet and plate prices. That was up two percentage points in two weeks. Some flexibility is returning, but it does not justify buying surplus stock.

What I'd do: secure material for scheduled jobs and confirm both quote expiry and delivery. For tube, ask whether a quote dated before September 29 is still honored. If it is, order firm requirements against it. If it has expired, price the job at the new level. For November plate, use your distributor's cutoff.

From our benchmark

These are list prices from one national distributor, Southern California basis. We compare complete-week medians for the same products, September 14 to 20 against September 28 to October 4.

Bars dominate the flat steel median, hiding the tube and sheet increases. A500's increase is new since #017. Individual bar prices can still change. Check the product on your PO.

Pricing notes

Stainless: Outokumpu's October coil surcharges fell 1.65 cents/lb for 304 and 1.21 cents/lb for 316L against September. North American Stainless's base increase of 7.5 cents/lb applies to 17-4, 416 and 410 round-bar shipments from October 1. These cover different products and do not offset. Our daily 416 round-bar list observations rose a median 11 cents/lb on October 2, despite a flat complete-week median. Ask for the base price and surcharge month separately on your stainless quote.

Aluminum: the 6061 distributor list median was flat over the same complete weeks. Plate was the exception, up 4 cents/lb. Confirm an existing 6061 plate quote before it expires and cover committed jobs.

Brass: #017's brief C360 decline did not hold. C360 rose again from September 24, and the complete-week increase was 4.4%. Preliminary October 5 observations show a 33-cent/lb decline, reversing part of that rise. One day is not a trend. If your C360 quote dates from late September, ask for a fresh one.

Cost pressure: in #014 I said another slowdown in ISM's survey of factory buyers' material costs would support an easing call. It did not happen. The Prices Index held at 71.1 in August, then rose to 77.9 in September. Those are survey readings, not percentage price increases. Keep steel and aluminum job budgets tied to supplier quotes rather than assuming broad relief.

Diesel and freight: EIA's September 28 survey put diesel at $6.382/gal, down $0.147. Ask when that reduction reaches your carrier's fuel surcharge.

Beyond prices

• Steel labor, September 26 and 30: the Steelworkers' Cleveland-Cliffs update said contracts would extend on a rolling 48-hour basis after October 1. US Steel published a five-year proposal September 30. For mill-dependent sheet, ask how your supplier would handle a disruption.

• Jobs and financing, October 2: BLS reported September payrolls up 29,000 and unemployment at 4.2%, both little changed. Get a written machine-financing rate and expiry date. Do not budget for an assumed cut.

• Carbide, October 1: Sumitomo Electric Hardmetal's August 7 Japanese notice revises manufacturer selling prices for orders from October 1. It does not set resale prices. ISM's October 1 report also lists tungsten products in short supply for a third month. Ask your US tooling distributor whether the notice affects your inserts, and confirm lead time on your grades.

What I'm watching next

• October 6: EIA's next diesel release. Compare its survey date with your freight quote.

• October 6 onward: Steelworkers and company bargaining notices. If a disruption is announced, ask your sheet supplier which of its mill orders are affected.

• October trading week: the scrap settlement, a cost input for steel bars and beams. BL Duke's September 30 forecast called for an increase; SMU's October 1 sources were less certain. Ask which settled cost, if any, supports a new bar quote.

• October 23: Nucor Tubular protects booked tube orders shipped through this date. Nucor also closes November plate submissions. These are separate mill terms. Ask whether your distributor's quote or order cutoff is earlier.

Which quote changed on you this fortnight? Email me. One line is plenty.

Wondering whether a material quote is high? Run it through Quote Check, paste the quote, and see where it lands against published distributor pricing for that alloy and size. Free, takes about a minute.

---

---