In June, many U.S. steel mills announced price hikes on hot-rolled coil prices in the $50/ton range. The general belief was that these price hikes aimed to set a floor to declining prices and provide pricing support for the near term.

In June, many U.S. steel mills announced price hikes on hot-rolled coil prices in the $50/ton range. The general belief was that these price hikes aimed to set a floor to declining prices and provide pricing support for the near term.

As of July 12, the domestic price of hot-roll coil was $885/ton. That is down only about $5/ton from the prior week, which could indicate prices are stabilizing. At a broader level, these three factors could support that belief:

1. Chinese steel stabilizing. As of early July, the price of Chinese steel was roughly $486/ton. Even though the price is well below that of domestic steel, prices are slightly stabilizing. China makes up a large percentage of the global steel market, which means prices in this region can often act as a buoy for global prices.

2. Import flood more of a trickle. 1. As domestic prices continue to rise in the early part of the year, some anticipated that this would open the door to increased imports. Even though flat-rolled steel imports recently reached their highest level since August 2022, the expected flood of imports has yet to materialize, allowing domestic producers to maintain some pricing discipline.

 

3. The future doesn’t look sticky. The futures pricing data for hot-rolled coil shows a slight upward trend but does not extend beyond the summer months. That suggests that futures traders believe prices won’t move higher long-term but stabilize.

 

Steel prices stabilizing

 
Commenting on that third factor, Nick Webb, Ryerson's director of risk management, commodities hedging, says, "I think what we are seeing is a bit of a tug of war in the steel sheet market right now where many are weighing price hikes and outages at the mill level with a somewhat consistent slowing of manufacturing activity across the globe."

It’s an interesting phenomenon where the futures data says that these price hikes might stick for a month or so before returning to business as usual.

 

Browse steel Ryerson

 

 

Are Aluminum At Risk for Shortage?

 

Annual producer price inflation is at its lowest level since August 2020. That could be good news for the supply of aluminum.

The June PPI (Producer Price Index) from the Bureau of Labor Statistics came in at 0.1%, continued its decline since peaking at 11.2% in June 2022. As a key inflation measure, the PPI tracks the average price change businesses pay to suppliers.

Here is how that relates to aluminum. Aluminum producers are experiencing significant challenges due to increased costs of inputs, particularly energy and labor. These factors directly affect the price of LME aluminum, which has remained relatively stable at around $1/lb., for the past few months. Energy costs have come down recently. LME Aluminum is affected by traders and speculation reacting to perceived market drivers.

The market sees the lower inflation numbers as a positive because it supports the Fed not raising interest rates. Traders hope that if the Fed does not raise interest rates again, it will support more investment which could drive demand for aluminum.\

 

However, in early July, the price dropped to as low as 94 cents/lb., a range many market participants consider "unprofitable" for smelters to continue production. Consequently, one way the market could come out of this is if these producers temporarily suspend their operations, reducing the overall supply until aluminum prices recover.

As of July 13, LME aluminum’s price was above $1/lb.

 

Browse aluminum Ryerson

 

Are Nickel Prices at Risk?

According to financial services company ING, nickel prices on the London Metal Exchange have declined 37% over the first half of the year. This is expected to continue in the second half of the year and even test lower levels. Here are two driving factors, according to ING:

  1. 1. China, which accounts for nearly 70% of the world’s nickel consumption, has not rebounded as quickly as anticipated from COVID-19 lockdowns.
  2. 2. Excess supply in the market, particularly from Indonesia. According to ING, nickel mine output from the region grew by 48% to 1.58 million tons in 2022. This has been driven in large part by the ever-expanding demand for electric vehicles.

Click here to read the full article.

Browse stainless steel Ryerson

Rethinking Supply Chain Resiliency

Bloomberg Supply Chain Map
 
When business leaders talk about supply chain strategy, one word comes up no matter the region or industry vertical: resiliency.

"Decision-makers want better resiliency in their supply chains,” says Brian Seeley, general manager for Ryerson Advanced Processing. “Companies have seen locations go offline because of the unexpected—now, they’re looking for partners who can ensure delivery amid ongoing and future disruptions. Having that dependability is critical no matter the location."

A truly resilient supply chain is no small feat, but the lessons of the past few years have given us a look into what creates future success. Achieving an ever-ready supply chain means putting stability at the center of your supply chain strategy by focusing on five core principles.

Read the full article on The Next Shift, a vibrant community that thrives on answering today's most significant global supply chain questions.

Ryerson: The Metal Supplier of Choice

Ryerson is a leading North American metal supplier that provides more than just metal. We respond to the ever-changing needs of manufacturing today.

With a vast inventory of steel, stainless, aluminum, alloy, and more, we are committed to providing our customers with the metal and services they need to succeed. We stock a range of shapes and sizes, or we can provide processing and fabrication for every product we sell.

Order online at Ryerson.com for comprehensive pricing and fast delivery, or contact us today to learn more about how we can meet your metal needs.

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