Metal Price increase

There was a large bit in the Portland OR paper this week about steel prices going up. Some 30%. It seems that China is sucking up all that it can get. Even the scrap dealers were complaining about the rise in the shipping costs to ship the scrap to China. lg no neat sig line

If you want the full story, go to (American Metal Market). You'll get current and historical prices, big moves in the market, forecasts, and the works.
Ed Huntress

Hmmm. Maybe this is a reason for my new shop to be wood structure? 39% would be a big jump. Didn't I hear Bush's name and the words steel tariff in the same sentence a couple of weeks ago? I'm not politically oriented, but I remember seing something in the paper.
RJ

Hey Jim,
Not a direct answer, but it must be a pretty competitive market recently. A large (to me) steel producing company in Hamilton, Ontario, has just filed for "creditor protection". The company wants the work-force to take about a 20% reduction in wages/benefits, or else. I have not been following the company's recent history, so I can't say whether any of this is influenced by the US restrictions (embargo?) of Canadian steel or not. But it does indicate some problems somewhere.
And there was a thread here recently about exactly what you were told. The scrap metals industry has gotten rich sending everything to China, and now the value of scrap is high and the availability low.
Take care.
Brian Lawson, Bothwell, Ontario. XXXXXXXXXXXXXXXXXX

The situation is complicated. Bush was recently forced to rescind imported steel tariffs, world demand is down, and Chinese demand is slackening, so one would think prices would fall.
But in the US, steel makers are so cash strapped that they can't increase output at current prices, domestic demand is on the rebound, imports haven't yet increased, and steel distributors are saying warehoused supplies are tight. So prices are rising at the distributor level. This likely won't last as imports rebound, but for now there is a pricing bubble.
Gary

Bush's steel tariff was put in place a couple of years ago and recently removed. So one might think that steel prices would be going down in the US. But China is importing and using large amounts of steel and steel scrap, so steel prices are going up. The world wide glut of steel has ended.
Dan

continually...
In Houston, the price on small diameter (3/8" - 2") black pipe is rising steadily, as is the price of gauge size A-36 plate.
I'm still trying to figure why 3/8" black pipe costs almost twice as much as 3/4" black pipe. (!)

I ordered some 1/2" rd 304 ss, I was told there is a surcharge on all SS and the amount depends on the amount of nickel in it, I think it was an extra 9 cents ($cnd) a foot. I thought there was a glut of nickel but obviously not.
Jim C Roberts wrote:

Lumber prices in the US a pretty high also because of the 39% duty on softwood lumber that was imposed to prop up your failing west coast lumber barons. Canada keeps getting these overturned by Nafta but in the meanwhile the US comsumer pays more and puts Canadian lumber mills out of work, just to line the pockets of a some already rich men.
Backlash wrote:

There is an ongoing strike against one of the big nickel producers.
Gary

I posted this on Dec 4, but it looks like it is still valid- the shortages appear to be more than just a passing thing:
MONACO, Nov 4 (Reuters) - Nickel prices could reach more than $15,000 a tonne ($6 a lb) in 2004-5 because of an expected boom in Chinese demand, an extremely limited supply response and chronically low global stock levels, an industry analyst said on Tuesday.
In a paper to delegates attending a Metal Bulletin (LSE: MTLB.L - news) ferro-alloys conference, Jim Lennon from Macquarie Bank said prices could push up to levels last seen 15 years ago.
"Prices will have to rise sharply -- and may stay high for a long time," he said.
China would play the dominant role in nickel prices because of the strong pace of its demand, particularly in stainless steel production, he said.
In global terms, Chinese consumption accounts for more than 21 percent of a total 1.242 million tonnes.
Stainless steel production accounts for two-thirds of nickel consumption.
Ferrous Price Spike Predicted
Vicki Roche, a scrap buyer for steelmaker Gerdau AmeriSteel Corp., Tampa, Fla., said she has seen scrap prices averaging about $3 per ton higher thus far in September. She noted that offshore demand for ferrous scrap is likely to continue and that pig iron out of Brazil is sold out through January of 2004, causing further demand strain on the market.
According to Roche, though, some of the other ?perfect storm? factors that drove scrap prices up are alleviating. She noted that the labor situation that restricted DRI production in Venezuela has eased and that the Russian 30-euros tax on exported scrap could be lifted sometime soon.
Industry analyst Marcus, though, believes there are still overall supply constraints that, coupled with a booming Chinese steel industry, will make for a lack of steel furnace feedstock relative to global demand.
Marcus said that even though much of the new Chinese capacity consists of blast furnaces, a shortage of iron ore capacity will cause buyers at these mills to seek more scrap from an obsolete scrap reservoir that is already straining to feed the world?s electric arc furnace (EAF) mills.
That shortage is already showing this year, by Marcus? calculations, with a theoretical shortfall of 36 million metric tons of obsolete scrap in the market in his ?most likely? scenario, followed by shortages of 40 million metric tons next year, 45 million metric tons in 2005 and 50 million tons by 2010.
Best regards, Spehro Pefhany

We are in in the midst of historically high prices in ferrous scrap in the US right now and will be for some time. Several factors are at work, as previous posters have mentioned, high Chinese demand for scrap, a very tight pig iron market and high ocean freight charges. I run an iron foundry in the upper Midwest and my costs for both steel scrap and pig have gone through the roof!
On top of very high pricing and shortage of ferrous material, other material pricing has become very volatile; nickel has become very expensive and may get worse due to the strike at Falconbridge, copper, moly, manganese and vanadium are up appreciably. The only material that has not gone up seems to be aluminum.
I deal in both the Chicago and Detroit markets and if you thought 4th quarter 2003 and Jan. 2004 prices are high, my sources tell me you ain't seen nothing yet!