November 2021 Porter Partnership Forecast
Our second to last monthly forecast of 2021 brings you the latest developments on price escalations, industry trends, increases in lead times, and other factors impacting our supply chain.
To date, we’re sitting right about almost 500 individual price escalations as a company for the year. Nevertheless, our team remains committed to being your go-to source for value and transparency relating to supply chain disruption and otherwise – as we close out 2021 and beyond!
The Comex traded over the past 30 days between $4.19/lb., and peaked Oct. 20th at $4.76/lb. The average price during October was $4.45/lb. Coppers October’s monthly average on copper was up over September’s $4.27/lb. and $3.06/lb in October 2020. This month-over-month increase breaks a 4-month pricing reduction cycle. Many mills are running lead times between 6 – 8 weeks. ACR 10-12 weeks. These lead times are heavily impacted by trucking availability, mixed with the accelerated demand for copper tube. These lead-times will continue through the fourth quarter. Before the current material shortages, the average lead-time on copper was 1-3 weeks
The power rationing activities in China have continued to diminish the availability of refined copper, further stretching supply. This activity will cause a leveling off from the recent price retraction and put upward pressure on copper in the coming months. We expect copper to trade between $4.20 – $4.70 in October.In the long run, we remain very bullish on copper and expect a strengthening in prices as we exit 2021 and enter 2022. Demand for copper in the EV and renewable energy markets continue to rise at an ever-increasing pace further restricting supply.
Domestic Carbon Steel Pipe
HRC closed out October at 1900/ton which is a $59/ton decrease for Oct. – Domestic Mill lead times are in the 6 – 10 week range or longer. Before the material and product shortages we are currently experiencing, the average lead-time on steel was 1-3 weeks. We expect the cost of coil to stabilize in November around $1,890 – $1930/ton. Lead times remain extended with restricted coil capacity continuing through the fourth quarter of 2021. Recent weeks have shown a leveling off on HRC price and a slight retraction. The next price driver will be two of the following. Infrastructure bills are making their way through Congress. If one or both of these passes, we expect to see more rises in coil pricing. Section 232 Tariffs have been applied to most imported steel sources (which took effect back in March of 2018). These tariffs are currently under review by the new administration. It’s said that these will remain in place for the foreseeable future. Thus, keeping pricing escalated.
PVC Pipe and Fittings
There was a fire at LASCO’s upstream supplier of resin compound on Oct. 22nd that has caused some large- scale disruptions in the already stretched PVC fitting supply chain. Fitting manufacturers have already increased their pricing 5-9% in June… 5-10% in July…7% in August…6% in September, and 8-10% through Oct. 25th. Following the Westlake Global Compounds plant fire in Gallman, MS, LASCO announced a 10% increase effective Nov. 1st. LASCO also stopped taking new orders on fittings effective 10/26-10/29/21, followed by an immediate rise of another 10%. The heaviest availability impact as things currently sit is on CPVC Sch 80 fittings. LASCO has claimed Force Majeure and has put all their customers on allocation of 1/24 annual purchase history. With the further reduction in overall capacity on PVC fittings, we expect another round of escalations to be announced from all fitting manufacturers this month.
Manufacturer lead times on plastic pipe exceed 14-18 weeks, with all producers publishing allocation notices. Some manufactures have stopped taking orders for Sch40 PVC pipe or are limiting their size offering to focus on their core customer needs. Prior to the current market environment, previous lead times were 1-2 weeks. The allocation mentioned above has been further reduced by some from a 1/12 annual purchase allotment to a 1/24 allowance. Resin shortages will continue to be a concern and an impactful price event through the end of the year and continuing well into 2022.
Domestic Carbon Steel Fittings and Flanges
Weldbend announced a price increase effective immediately 11/1/21. Most notable increases impacted Flanges with an increase of roughly 10% and weld caps with an increase of approximately 25%.
Import Carbon Steel Fittings and Flanges
Fitting and flange importers are moving pricing to the new domestic price sheet. Some of the increases listed above will be applied to import flanges and caps.
Stainless Steel Pipe and Fittings
Downstream demand for refined Nickel products has remained extremely strong. Nickel set a new 7-year high record Oct. 21st of $21,425/ton due to the dramatically reduced Q3 production at the top two Nickel mines and further speculations out of Indonesia regarding decreased exportation requirements of high-grade Nickle Pig Iron. Chinese output has been substantially reduced since the middle of the year, as authorities look to curb carbon emissions ahead of the Winter Olympics early next year.
Supply of finished material continues to experience disruption as labor shortages impact offshored material at the ports — overall, transportation restraints continue. Shortages continue on imported welded A312 pipe. We expect continued price increases and product availability issues through the first quarter of 2022.
Domestic Hangers, Channel Strut Fittings
The 8% – 15% increase on strut fittings (effective Oct. 4th) has taken effect, and another 5-7% increase is scheduled for Nov. 8th. We expect these increases to hold. The 10% – 14% increase on hangers went into effect on Oct. 4th; however, an additional 9% increase is set for Nov. 8th. We expect these increases to hold. We do expect continued increases in this product segment in Q4 of 2021.
Welded Pipe Nipples and Malleable Fittings
There is an increase of 5% on welded nipples effective Oct. 4th, 2021. There is an increase of 13% on seamless nipples effective Oct. 4th, 2021. Malleable iron fittings will increase by 8% on Nov. 8th.
Viega Press Fittings
As of Sept. 1st, a 3% price increase on all press-fitting systems went into effect. This increase has remained.
Bronze & Iron Valves
Most manufacturers announced increases for the latter half of June or early July. These increases range from 3% – 8% depending on manufacturer and product. We expect supply disruptions in this product segment as components continue to be held up at the ports. We are expecting another round of increases to be announced and adopted in November and December.
There was another round of increases—much of which went into effect immediately.
A105 Forged Fittings and Branch Olet
The scheduled price increases in July were then pushed to September and have since been implemented. 11.5% on Forged fittings and unions and 15% on Branch Outlets.
Charlotte Pipe issued a price increase announcement of 6% scheduled for Jan. 1st, 2022. Tyler has not announced an increase at this time.
Jay R. Smith
There have been multiple price changes on drains recently. Please get in touch with your sales professional for details.
This month, we feel more grateful than ever as we celebrate our 45th Anniversary since opening our doors as “Porter Supply Co” on Nov. 2nd, 1976. To all our partners, long term or new, we THANK YOU for giving us the opportunity to serve as your wholesale supplier and source for industry information. Cheers to you and continued partnership!
Follow along as we go back in time to celebrate our 45th Year by following #PorterPipe45