2021 End of Q1 Porter Partnership Forecast
Dear Porter Partners,
As we near the end of Q1 2021, we remain committed to our promise of providing you with up to date, relevant industry market information in both a transparent and timely manner. As trusted partners, it is important we share both good and challenging news, as it is beneficial and important you understand the status and driving factors of the price escalations we will face in 2021. Proactive, diligent planning during this will be key!
We will continue to provide you with industry market updates throughout 2021, as we continue to navigate this ever-changing market together.
Copper Tube and Fittings
Copper prices climbed to their highest levels since January 2013 on Friday February 26th as investors in the commodity anticipate rising demand for infrastructure and construction projects in the post-pandemic economy. The copper fitting increase announced in January has held, and the March 15th, 2021 announced increase of approximately 8% is expected to hold as well. For the next 30 days, we expect the Comex to continue to trade around $4.00 dollars with a peak of $4.50.
Domestic Carbon Steel Pipe
HRC increased this week to $1,204/ton. Domestic mills lead times are 8–12-week range or longer. We expect the cost of coil to continue to increase over the next month, approaching $1,300/ton. Even as increased capacity is coming online, we do not envision the cost of coil to recede anytime soon.
PVC Pipe and Fittings
After the rapid price increases of Copper and Steel, PVC is the next product segment poised for price escalation. The ice storm in Texas greatly impacted the production of PVC resin. 3 of the 4 resin producers claimed force majeure. Resin converters are reporting shipments of 70% or less originally ordered quantities.
Resin producers have still not fully recovered from the hurricane season and the winter storms only further constrained supply. 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.
Import Carbon Steel Fittings and Flanges
We took an approximate 15% increase on this product segment within the last month. While we do not expect this to be the last increase of the year, we do not anticipate there will be an increase on this product segment within the next 30 days.
Stainless Steel Pipe and Fittings
Nickel has increased over 23% since the end of Q3 2020. Demand for Nickel has been steadily increasing…Overseas freight costs have seen double digit increases. This combination has increased coil, plate, and pipe pricing, which in turn have pushed BW costs up considerably. Market demand for nickel-based products is extremely strong relative to the availability of goods. Late deliveries are causing spot shortages at the Master distribution level.
We have seen rapid and immediate price increases on this product segment. Most notable last week we took an immediate 20% increase on our flanges while the rest of the product segment averaged 9-12%. We have seen back-to-back price increases on pipe totaling more than 20%. In addition to base price increases, rising costs of ferrous scrap, nickel and other alloys led to higher surcharges.
Prices are expected to be up in March as mills are forced to apply base price increases and higher alloy surcharges.
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 announced another round of increases on Channel, this one is ranging for 6-25% taking place in April.
Welded Pipe Nipples
Moved up 6-8% in January and will take another 12% increase in April.
Bronze and Iron Valve Pricing
NIBCO, Milwaukee and Jomar have announced price increases scheduled for March—these range from 9-12% depending on the material. We anticipate Apollo and Stockham to follow suit and increase their prices as well.
Victaulic announced a 6% increase April 1st.