2021 Start of Q2 Porter Partnership Forecast
Dear Porter Partners,
We wish we could start off Q2 of 2021 with better news regarding commodity pricing and lead times…however, as your trusted wholesale distributing partner, it is imperative you, our partners, are aware of the current market environment so you can plan out projects accordingly with diligence.
Over the past 30 days we have seen an increased amount of price escalations. Between the increases already announced and the ones scheduled for April 2021, we will be at 200+ individual price escalations this year so far. These escalations continue to revolve around shortages of raw goods, along with manufacturing / labor constraints. The global supply chain logistics are being challenged with no reprieve in sight. Wait times at ports for ships to get unloaded continue to push out. Domestically between the winter storms in the south and the inability for manufacturing to get raw goods and fill their labor needs has continued to contribute to price escalations and shortages.
Nevertheless, we will continue to serve as your trusted partner for pertinent industry market updates throughout 2021 and remain committed to being your go-to source for value and transparency.
Copper Tube and Fittings
The Comex has traded over the past 30 days between $3.98 and $4.14. Many mills are running lead times between 4–5 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. The cost of copper tube will continue to be elevated through the remainder of the year as other variables such as transportation and labor costs have a higher-than-normal impact on the finished goods total price. We expect to see the Comex continue to trade around $4.00 for the next 30 days, with a peak of ~$4.50.
Domestic Carbon Steel Pipe
HRC increased the first week of April to a new high of $1,328/ton. Domestic Mill lead times are 8–12-week range or longer. We expect the cost of coil to continue to increase over the next month approaching $1,400/ton. Lead times remain extended with restricted coil capacity continuing through the second quarter of 2021.
PVC Pipe and Fittings
Resin converters are reporting shipments of 50%-70% or less originally ordered quantities. Resin producers still have not fully recovered from hurricane season and the winter storms only furthered supply constraints. Resin producers are still claiming force majeure and April marks the turnaround maintenance month for producers. This will further constrict 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. We saw an 8% DWV fitting increase on March 1st. We just received notice of another 12% increase on DWV for March 17th and will see a 5% pressure increase on April 1st.
The previously announced increases have held. There is another DWV increase of 10% scheduled for April 12th. This will hold as well. There will be another round of minimum double digit increase on DWV and a single digit increase on pressure fittings by the end of the second quarter. Manufacturer lead times on plastic pipe are extending 6-8 weeks with many producers publishing allocation notices.
Import Carbon Steel Fittings and Flanges
There was another 12% increase announced today on this product segment and we expect another double digit increase by the end of second quarter 2021.
Stainless Steel Pipe and Fittings
Stainless steel prices have rapidly increased within the last 30 days and we expect this to continue all of April. Supply of finished material continues to be disrupted as the offshored material is impacted by labor shortages at the ports—overall transportation restraints continue. This product segment is showing no signs of any sort of regression, even before the end of the year.
With the issues currently happening at the ports and the limited supply offshore with demand far outpacing supply, by August we would expect another 10% above the previously mentioned increases. We recommend you keep an eye out on your stainless-steel ANSI flange needs, supply is extremely tight right now after the most recent ITC action.
Domestic Hangers, Channel Strut Fittings
With the core component of this product segment being steel, we have seen multiple price escalations announced ranging from 6-8% on both rounds of increases. There was just another round of increases released on Channel, this one is ranging for 6-25% taking place in April. We anticipate another round of escalations to be announced sometime in Q2.
Welded Pipe Nipples
There is a 12% increase in April, we expect this to hold.
Bronze and Iron Valve Pricing
All major valve manufacturers have all announced price increases that took effect in March or will take effect in April. These tend to range from 9%-12% depending on base metal makeup.
A105 Forged Steel Fittings and Branch Olets
There will be a 10% increase on Fittings and a 15% on branch outlets April 12th.
They have announced a 6% increase as of April 1st.
There is an increase scheduled for April 15th. Below is the breakdown of the increases: