2018 Q1 Supply Market Outlook


2018 Q1 Supply Market Outlook

The most impactful highlight of 2018 Q1 remains to be the Section 232 Act Investigation under the authority of the Trade Expansion Act of 1962.  On January 11, 2018, the findings were turned into the Trump Administration along with committee recommendations.   With an April 11, 2018 deadline, we will soon know what, if any, government regulation will result from these proceedings.  For the past twelve months, the largest American steel manufacturers have realized seven-year highs in GM$ and most recently have aggressively raised the hot rolled coil (HRC) market price by 21% since October 2017.  We anticipate another 8-10% increase prior to April 11, 2018 on domestic HRC.

Import ERW A53B market pricing is holding in the low 900/NT range largely due to recent Chinese HRC tariffs imposed by the US and China recently decommissioning 20% of their total steel production due to quality and emissions reform.  If action is taken under the Section 232 Act, we feel it will be in the form of quotas, not tariffs.  Import ERW A53B should become highly desired if quotas are imposed under Section 232.


BE CAUTIOUS in your bidding!   If Section 232 moves in favor of protecting American steel manufacturers, we can expect to see IMMEDIATE price and lead time increases.  In addition, Oil Country Tubular Goods (OCTG) demand continues to show tremendous year-over-year growth getting preferential scheduling due to higher profit margins at pipe mills already operating near 80% capacity.

Copper continues to be extremely volatile having reached a three-year high in October 2017 and a 66% increase since January 2016.  While still under a global supply deficit, China reached an all-time high in December 2017 copper output and supply concerns are starting to diminish.  We project the Comex to continue to be strong near the $3.20 mark through 2018 Q1.  The market can expect to see a 6-8% copper sweat increase very near the April 11 Section 232 ruling.


We are definitely in a bullish market on both ferrous and nonferrous categories.  Increased demand generated by energy infrastructure development, residential construction and gas distribution projects coupled with numerous ITC trade cases seriously affecting supply has crippled several categories.  Please review our 2018 Q1 market outlook for the following categories:

  • Domestic A53B GrB, A53F GrA & A135/A795 Pipe – Expect a single digit increase awaiting 232 ruling.
  • Import A53B GrB – Pricing and lead time remains flat.
  • Copper Tubing – Relative flat pricing tied to Comex.
  • Weld Fittings & Flanges – Prices and Lead times have shown signs of increase. Weldbend CEO, Jim Coulas, reported three raw material cost increases in the last half of 2017.
  • Copper Sweat / Press – Expect a 6-8% increase in 2018 Q1.
  • Iron Fittings – Anvil and Ward both increased 6% in January 2018. We forecast an additional 6% increase right before the Section 232 ruling which may not hold depending on the results.
  • Hangers – Most hanger and strut manufacturers have increased price by 10% in January 2018.
  • Bronze & Iron Valves – We expect to see a 5-7% increase in 2018 Q2.
  • Victaulic Grooved Product – 8.5% increase on February 2, 2018.
  • Stainless Steel Pipe & Fittings – Expect stainless pricing to hold through 2018 Q1 & Q2. Surplus has been restored globally by Indonesian and Philippine supply.  Electric cars have not consumed the tonnage as previously speculated.
  • Forged Steel & Seamless Nipples – Bonney Forge is leading a trade case against import forgings with a final ruling date of 04/30/18. We expect the market impact to be very similar to what we saw with carbon steel flanges most recently.

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