January Market Minute 2023
Sheet Up, Plate Down
In 2022, steel sheet prices declined roughly 50%, while plate prices only dropped roughly 10%. This has left a price gap between the two products of roughly $800/ton, well above the historic gap of $150-$200/ton.
So, how are these products starting off the new year?
Domestic steel mills announced a series of price increases on sheet. This is in effort to offset rising input costs, among other factors. As of January 11, the price of hot-rolled sheet was roughly $712/ton.
Plate prices continue to drop, hitting roughly $1,440/ton in early January. However, the rice gap between plate and hot-rolled steel remains well above the historic average.
Raw steel production remains low, with domestic mills reporting a capacity utilization rate at 71.3% in the week ending January 7, according to the American Iron and Steel Institute. This is down from the utilization rate of 79.8% in the same week last year, and slightly down from 71.8% the week prior.
Nickel Keeps Surcharges in Flux
It’s been difficult to predict exactly where nickel prices may land lately. In early November, they were around $10/lb., before jumping 50% to roughly $15/lb. by mid-December. To start 2023, nickel prices are hovering around $12/lb.
Nickel influences stainless surcharges. For instance, in January
304 surcharge is 1.3391
316 surcharge is 2.0330
The expectation for February is:
304 surcharge $1.4122
316 surcharge $2.1251
However, it is important to note that we are still early in the projecting period and February surcharges can change.
Get Your Rebar Locally
It may be easier and more cost effective to get concrete reinforcing steel bars in 2023. According to S&P Global Platts, companies are relying less on costly imports as availability at domestic mills continues to rise.
U.S. Census data shows that U.S. imports for consumption of these products totaled 56,798 metric tons in November, down 34.5% from October.
S&P Global Platts says imports are expected to remain limited as buyers continued to pass on foreign offers in favor of larger tonnage due to uncertainties around demand and domestic prices.
What Contractors Are Saying
What will the construction market look like in 2023? According to a recent survey from the AGC (Associated General Contractors of America), contractors are optimistic about the year ahead, but with some caveats.
Respondent to the AGC survey cited optimism about many private-sector segments and relative bullishness for public funding in 2023.
On the flipside, contractors surveyed expect to continue coping with “erratic and unpredictable” supply chain challenges, rising material prices, and workforce shortages.
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