Update 3/16:
The steel market has been highly volatile recently, and market conditions are rapidly changing day-to-day. As a result of rising shipping and freight costs and tightening supply due to manufacturing disruptions stemming from the turmoil in Russia and Ukraine, a price increase of $400/TON or 25% is now in immediate effect. A new list price sheet dated 3/16 will be available on our website.
Update 3/14:
Due to rapidly escalating input and freight costs, domestic steel pipe mills have announced another price increase of approximately 20% or $200/ton. A new list price sheet dated 3/15 will be in effect tomorrow and available on our website. Also, an import steel pipe increase of up to $400/TON or 30% will be taking effect on Monday, 3/21.
Original post 3/14/22:
Due to rising input and freight costs, domestic steel pipe mills have announced a price increase of approximately 10%. A new list price sheet is now in effect, which you can download here.
Also, an increase of 10% on import steel pipe will be in effect Monday, 3/21. Please call your Merfish United representative for more information or to place orders now.
Competition for raw materials, like steel, is increasing from the OCTG sector and other finished goods manufacturers. Increased consumer demand and a decreasing global supply of critical materials like nickel, zinc, and iron ore drive rising input costs. These conditions mainly stem from supply chain disruptions out of Ukraine and Russia, where steel and oil exports are either stopped due to sanctions or unable to operate because of wartime conditions.
What’s Happening With Steel?
European steelmakers are cutting back operations as energy prices skyrocket, despite steel trading at near-record levels. There are new limitations on gas imports from Russia that fuel electrical power stations, which power electrical furnaces that produce steel. The high cost of energy is causing producers in Europe to scale back or stop production, sending ripple effects through an already tight global supply due to the loss of steel output from Ukraine.
As the market adjusts, steel supply slack may be picked up by China for certain manufacturers outside of the U.S., in India, and by new facilities are coming online here in the country but will take time to catch up.
Also, due to the loss of Russian oil and gas in the market, oil production in the U.S. market is picking up and may see an even more significant increase soon. Oil country tubular goods are milled using the same rolled-steel coil that plumbing pipe and other tubular products use, and the increased competition for these raw materials may mean longer lead times from mills.
Gas prices are rising, which increases shipping and freight costs, including trains, trucks, ships, and barges.
For now, global supply is becoming more limited as the demand for remaining hot-roll coils and raw materials increases. Manufacturers of finished goods, including steel pipe mills, will continue to see a rise in input costs.
How We Can Help
Merfish United’s business model – which enables wholesalers to buy a broad array of pipe products from one supplier, at low minimums for FFA – is designed for low and unpredictable volume scenarios, exactly like the one we are in right now. Call your representative now to schedule your next weekly delivery of mixed-and-matched pipe products.