2021 Beginning of Q3 Porter Partnership Forecast
We have made it to the midway point of 2021! While the first half of the year has been a bit of a whirlwind in terms of lead times and escalations, we hope you have found value in these monthly forecasts, and that they’ve been useful in planning your projects for success in this ever-changing environment. Knowledge is power!
You may have noticed a newer addition to these forecasts with the inclusion of comparison notes providing you with insight into what we previously would have seen in terms of pricing and/or lead times prior to the material shortages. This addition was because of feedback from YOU! Therefore, if you ever have any feedback or ideas on how we can make these forecasts more valuable to you, never hesitate to do so.
On behalf of all of us in the Porter Pipe & Supply Family, THANK YOU for your Partnership! We remain committed to serving as your trusted wholesale supply partner. While the material shortages have certainly caused some disruption in getting material, our level of dedication in servicing you at the highest industry fill rate while providing best-in-class customer service has not wavered. We send our best wishes to you and your family for a healthy, safe and FUN summer 2021. God bless!
The Comex has traded over the past 30 days between $4.24-$4.55. Many mills are running lead times between 6–8 weeks. These lead times are heavily impacted by the availability of trucking, mixed with the accelerated demand for copper tube since the beginning of this year. This new lead-time is an improvement over previously published lead-times. These lead-times are expected to continue into the third quarter.
Prior to the material and product shortages we are currently experiencing, average lead-time on copper was 1-3 weeks. The recent slide in Comex pricing is due to China announcing the release of metals from their National Reserve to help curb commodity pricing. The auction will take place July 5th–6th and will be 20,000 tons of copper.
Over the next 30 days we expect copper to trade between $4.20 and $4.50.
Domestic Carbon Steel Pipe
HRC closed out June at $1,723/ton which is a $130/ton increase in the month of June. Domestic Mill lead times are 8–12-week range or longer. Prior to the material and product shortages we are currently experiencing, average lead-time on steel was 1-3 weeks. We expect the cost of coil to continue to increase over the month of July and anticipate it will exceed $1,800/ton. Lead times remain extended, with restricted coil capacity continuing through the third quarter of 2021.
PVC Pipe and Fittings
Resin converters are reporting shipments of 80-90% or less originally ordered quantities. Resin producers still have not fully recovered from last year’s hurricane season and the winter storms only furthered supply constraints. Manufacturer lead times on plastic pipe are extending 12-16 weeks with all producers publishing allocation notices. Some manufactures have stopped taking orders for Sch40 PVC pipe or limiting their size offering to focus on their core customer needs. Prior to the current market dynamics, previous lead-times where 1-2 weeks.
The above-mentioned allocation amounts have been further reduced by some from a 1/12 annual purchase allotment to a 1/24 allotment. Forecast currently is for a very active hurricane season. The average Gulf temperatures are trending up which will only lend credence to these predictions. If there is an active Gulf hurricane season this will further restrain supply of resin.
Resin shortages will continue to be a concern and an impactful price event through the end of the year. Other components such have stabilizers and TiO2 have increased over the last few months only furthering the price increases. With the shortages of these items manufactures cannot increase capacities and are suffering higher than normal input costs.
We received notification of a DWV increase of 6% effective July 6th. The previously announced increases have held. We further expect monthly price increase through the end of the year.
Domestic Carbon Steel Fittings and Flanges
We notified on July 6th of another increase effective immediately. This time it was applied to flanges. There will be more increases on both fittings and flanges by the end of the quarter.
Import Carbon Steel Fittings and Flanges
We received multiple price increase to this product segment in June. We are expecting another double digit increase to both fittings and flanges in July.
Stainless Steel Pipe and Fittings
Stainless Steel pricing will continue to strengthen in July. The largest impact will be on 316 grade goods due to the surge in molybdenum of 40%. The July surcharge for 316 grade stainless is up over 11% from last month. During the same time surcharges from 304 grade goods is up over 3%.
Supply of finished material continues to be disrupted as the offshored material is impacted by labor shortages at the ports—overall transportation restraints continue. Shortages continue on imported welded A312 pipe. Sanitary A270 has been extremely limited in supply as most domestic mills are running 30 weeks or longer lead-times at this point. The automotive sector’s demand remains robust despite the chip shortage. This is further constraining A270 supply as coil is being used to satisfy the automotive demand.
Domestic Hangers, Channel Strut Fittings
There will be an increase of 8-18% on Strut Channel effective July 19th. There will be an increase of 12-15% on Hangers effective July 19th. We do expect continued increases on this product segment in Q3 2021. This increase will hold.
Welded Pipe Nipples and Malleable Fittings
There is a scheduled increase of 6% on both welded and seamless nipples effective July 19th. This increase will hold. There is a scheduled increase of 8% on malleable fittings effective July 19th. This increase will hold.
Viega Press Fittings
This is an announced 3% increase to all press fitting systems September 1st.
Bronze and Iron Valves
Most manufactures have announced increases for the latter half of June or early July. These increases range from 3-8% depending on manufacturer and product. This will not be the last increase of the year.
A105 Forged Fittings and Branch Olets
There is a price increase on July 1st that will hold. 11.5% on Forged fittings and unions. 15% on Branch Outlets.
Victaulic announced a 6% increase on April 1st. This increase has held in the marketplace, with no new price increases currently announced for June.
Lochinvar Residential, Commercial and Tank Product
Effective July 31st the following product segments are impacted by another increase: Residential Water Heaters up to 12%, Commercial Standard Water Heater and Select Tanks up to 10%, and parts up to 6%.