Hillfoot bring you an update on the January 2021 surcharges for carbon and alloy steels.
Peter Morris, Supply Chain Director, said: “There has been a lot of talk around price and lead time movements in the market over the last 4-6 weeks, so we wanted to share our views of the current market activity.
- It's correct steel mills are now increasing prices, both in base prices and surcharges, following a lack of movement for the last 2 years. Scrap surcharge alone increased by £52/tonne from December to January, with further increases predicted from February.
- Escalating mill input expenditure is adding to this upward pressure on steel prices, particularly the rapid movement in iron ore and scrap values. Chinese steel production for their domestic market remains at record levels, but their increasing movement to ‘scrap-based’ production methods is creating an increased market demand. This is coupled with Russia having applied sizable new duties on scrap exports which have constrained sales to Europe.
- Mill lead times are generally toward the back end of Quarter 2, and even Quarter 3 in some cases. This is a notable increase from the second half of 2020, being driven by both speculative purchases as well as replenishment of depleted inventories by distributors and OEM’s alike."
If you have any questions regarding how this may effect your raw material demand, please contact the Hillfoot team for advice on your material requirements, and price and availability information. We will be happy to discuss further.
You can also click here to find out how the changes have affected the surcharge for specific steel grades.