Hillfoot brings you an update on the July 2021 surcharges for carbon and alloy steels.
Peter Morris, Supply Chain Director, said: “Here we are again,….another month, and another upward movement in the global markets. This time from an unlikely contender; molybdenum.
Generally this is a less volatile alloy but June saw an aggressive jump, reaching heights of almost double its position at the beginning of the year (see graph below). This Molybdenum surge has resulted in increases to July’s alloy surcharge from the global steel mill.
Couple this with another scrap surcharge increase, grades such as 709M40 (EN19) have seen steel mills increase their price by as much as £85/tonne in a single month.
Mill lead times are continuing to hold their extended position allowing forecasting to draw parallels with blindfolded juggling. The majority of mills are now quoting 2022 delivery, with some of them into Q2 2022 delivery for heat treated alloy grades.
Adding to this, some global mills are now adopting a pricing policy of ‘prices to be confirmed nearer production’ due to unforecastable input costs and volatility in the commodity markets. The result is that orders are effectively being placed on the mills simply to secure future capacity with prices being confirmed at a future date.
Adding to the current challenge of material availability within our domestic markets are the quotas on European imports; an unfortunate by-product of the divorce from our European partner.
Quotas for imports of European hot rolled engineering steels were maxed out towards the end of Q2, resulting in material being held at docks in bond in order to avoid a 25% tariff being applied to goods entering the country.
Material was subsequently released when the new Q3 quota opened at the beginning of July. The outcome was a delay to incoming material of approximately 2-3 weeks. Q3 import quotas continue to be monitored closely."
If you have any questions regarding how this may affect 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.