SBQ prices rise in US on surging demand
Special bar quality (SBQ) steel prices in the United States rose in March for both hot-rolled and cold-finished product due to rapid increases in demand and higher raw material costs.
Fastmarkets’ assessment for hot-rolled special bar quality 1-inch round 1000 series (carbon), fob mill US was at $51 per hundredweight ($1,020 per short ton) on Friday March 19, up by 15.91% from $44 per cwt on February 19 and by 47.83% from $34.50 per cwt in March 2020.
Fastmarkets’ assessment for steel bar cold-finished 1-inch round 1018 (carbon), fob mill US was at $68 per cwt on March 19, up by 10.57% from $61.50 per cwt the previous month and by 24.77% from $54.50 per cwt in the same month last year.
And prices appear poised to rise further after mills this month announced SBQ base price increases.
Demand for SBQ products has improved significantly and is likely to rise further, market participants said.
Demand is “very good” and lead times are “very long,” one mill source said.
A distributor in the South noted that demand has surged for SBQ from end markets, with mills struggling to expand production to meet this demand.
“Demand is crazy,” he said. “Lead times have moved out exponentially to five or six months, into August and September.”
In terms of a recovery in SBQ demand from end markets, the distributor said there is much more room for the various end markets to grow.
“Automotive is not going full bore,” he said, citing a shortage of computer chips. “Oil is not strong and agriculture can expand.”
A distributor in the Northeast said he, too, expects auto production to increase from current levels “once we get through this chip shortage,” which he thinks will last another six months.
The same distributor also noted robust business activity.
“Demand is very strong right now. It has exponentially increased over November and December, and I don’t believe it’s people hoarding material,” the northeastern distributor said.
“I bring in new materials from the mills that is supposed to last two or three weeks, and it’s gone in a day,” he said.
Not only has demand surged to pre-pandemic levels, it has increased by another 25%, the same distributor said.
The distributors in the Northeast and South both expressed concern that the announced mill outages in May and June will further constrict supply amid growing demand.