September 2021 Porter Partnership Forecast
This month’s forecast speaks to the various factors causing an impact (or anticipated impact) on the current state of the market environment. RThis month’s forecast speaks to the various factors causing an impact (or anticipated impact) on the current state of the market environment. Rest assured that we will continue to work closely with our network of vendor partners and industry market experts to ensure we plan out our inventory accordingly, and that we have the most up-to-date information to best arm you for proper project planning & due diligence. As always, please feel free to reach out to our team with any questions or for real-time updates.
The Comex has traded over the past 30 days between $4.04 – $4.39. Many mills are running lead times
between 6 to 8 weeks, with ACR 10-12 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 will continue through the fourth 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 market concerns about the slowing growth of the Chinese industrial sector and the worry around the role of the Delta Variant will have on economic recoveries. Despite the rebound since August 19th, we remain cautious on copper for September and October. We expect copper to trade between $4.00 – $4.35 in the month of September.
We remain very bullish on copper in the long run and expect a strengthening in prices when we exit 2021 and enter 2022. Demand for copper in the EV and renewable energy markets continue to rise as an ever- increasing pace further restricting supply.
Domestic Carbon Steel Pipe
HRC closed out August at 1910/ ton which is a $40/ton increase in the month of August. 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 September and anticipate it to exceed $1,950/ton. Lead times remain extended with restricted coil capacity continuing through the fourth quarter 2021.
PVC Pipe and Fittings
There was resin production impact due to Hurricane Ida. Louisiana produces roughly 29% of the US ethylene capacity. Due to this storm, 61.5% of Louisiana’s ethylene capacity is offline representing 18% of total US capacity. There was a PVC pipe increase of 8% implemented effective immediately July 30th, 2021. This has held. There was a 5% increase on pressure fittings and a 6% increase on DWV fittings announced September 1st that took effect September 5th. This will hold.
Resin converters are reporting shipments of 80% – 90% or less originally ordered quantities. 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, we face 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.
Resin shortages will continue to be a concern and an impactful price event through the end of the year. There will be continued price increases on all PVC segments soon.
Domestic Carbon Steel Fittings and Flanges
No new announced increases since July 6th, however we expect another round of increases soon.
Import Carbon Steel Fittings and Flanges
We are experienced another single digit increase to both fittings and flanges in August. Fittings especially long radius elbows are in short supply and will be fore sometime.
Stainless Steel Pipe and Fittings
Stainless Steel pricing will continue their upward pricing pressures in August and will not recede in September. The 304 grade surcharges are up 3.7% and the 316 grade surcharges are up 4.3%.
Supply of finished material continues to be disrupted as the offshored material is impacted by labor shortages at the ports — overall transportation restraints continue. July increases on Stainless Steel finished goods continued and held in August. Stainless steel ANSI flanges increased 16% – 20% and stainless steel butt-weld fittings and type “A” stub ends increased 21% – 25%. Shortages continue on imported welded A312 pipe. We expect continued price increases and product availability issues through the end of the year. On a brighter note, we expect domestically produced A270 Sanitary tube to be more readily available as the labor strike at ATI has been resolved. We look to the end of September early October for the supply chain to get better.
Domestic Hangers, Channel Strut Fittings
There was an increase of 8-18% on Strut Channel Effective July There was an increase of 8-15% effective August 23rd and another 8% – 15% effective October 4th on strut and supports. There was an increase of 12-15% on Hangers Effective August 23rd and another increase of 10% – 14% effective October 4th. We do expect continued increases on this product segment in Q4 2021.
Welded Pipe Nipples and Malleable Fittings
There is an increase of 5% on welded nipples effective October 4th, 2021. There is an increase of 13% on seamless nipples effective October 4th, 2021. No increases yet scheduled for malleable fittings, however we expect another increase this year.
Viega Press Fittings
This is an announced 3% increase to all press fitting systems September 1st. This has held.
Bronze & 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 Olet
The July scheduled price increase has been pushed to September and have now been implemented. 11.5% on Forged fittings and unions, and 15% on Branch Outlets.
On September 1st, 2021, there was a 12% list price increase on all Cast Iron Soil pipe and fittings. Effective October 1st, 2021, there will be an 8% increase on all no-hub couplings and service weight gaskets.
Jay R. Smith
There was an 8% increase August 2nd on the list price of specific drainage. The new list price PG-1B is now available.