This month, Argus reports, “A year after one of the sharpest production contractions in the US steel industry, domestic flat-rolled mills are reaping the benefits of historically high finished steel prices, tight supply and record scrap margins. US steel production and mill utilization have remained below year-prior levels for nearly all of last year because of Covid-19-related drops in demand, keeping spot and contract steel supply limited amid higher demand.”
In their February article, “Skyrocketing Steel, Lumber Costs Threaten to Slow Construction Jobs,” Construction Dive explains how this limited supply is causing pricing to increase. “Prices of both lumber and steel — two primary building materials — have surged anywhere from 20% to 25% recently, according to Daniel Pomfrett, national director of forecasting and analytics at construction cost tracking firm Cumming.”
This shift in “supply and demand” is not all bad news however. Construction Dive says, “Observers do see reasons for optimism. Mike Miner, director of pre-construction for Michigan-based Rockford Construction, one of the 400 largest contractors in the country, for example, thinks higher steel prices could end up creating a more lucrative supply incentive for producers. When steel prices go up, they turn furnaces back on, which is what they’re doing now and the market is changing in the world economy to the point where it’s worth us to make more of the steel at home.”
In fact, after Industry groups representing the top U.S. steel producers and the United Steelworkers union in January urged Biden to preserve the steel tariffs, calling them “essential” to the viability of the domestic industry, the new administration announced last month they will keep the current 25% duty on steel imports and 10% on inward-bound shipments of aluminum enacted three years ago in place.
While the initial impact has not yet been felt, additional steel supply has already come online this year including Arkansas-based EAF steelmaker Big River Steel and JSW Steel USA’s new mill in Mingo Junction. And later this year, the much anticipated new flat-rolled mill by Steel Dynamics (SDI) is expected to open in Sinton, Texas along with Nucor’s expansion of its Gallatin mill.
Back in June of last year, METALCONLive! viewers were given a sneak preview into SDI’s new 1.9 billion plant located outside Corpus Christi in Sinton, Texas. Brian Smallwood, market manager-construction for SDI, spoke as a guest speaker and gave details of his company’s expansion plans. He said, “SDI believes the U.S. should be as steel sufficient as possible. To do this, we should have highly efficient, modernized technology, environmentally friendly, geographically strategic steel plants in order to meet the steel demands in the U.S.” He added, “The new plant is estimated to produce 3 million tons of flat-rolled steel, will be the most technologically advanced mini-mill in the world and will produce 1” thick 84” wide coiled hot-rolled to meet some of Steel Dynamics demand in the energy market and for line transmission of fuel.” Click HERE to read highlights from that episode or watch the episode in our METALCON On Demand library. And look for SDI to be an exhibitor at METALCON 2021 with updates on their new steel mill.
MILL STEEL CO ANNOUNCED AS PLATINUM SPONSOR FOR METALCON 2021
Mill Steel Co., one of the nation’s largest distributors of flatrolled carbon steel, also recently expanded by purchasing commercial assets of Prassas Metal Products, a Los Angeles based steel trading and stocking distributor of pre-painted and coated coil products. This will help to strengthen the company’s geographic footprint with additional sourcing opportunities and greater reach in the Southeastern United States. After more than ten years of being a part of the METALCON event as an exhibitor or sponsor, we are thrilled to announce Mill Steel as a platinum sponsor for this year’s 2021 event scheduled to be held IN PERSON October 6-8 in Tampa, Florida.