Tex-Isle Supply Latest News

View important updates by Tex-Isle Supply, Inc.

Tex-Isle Service Case Study: Heat Treatment

Investing in Our Customer's Success

Tex-Isle developed proprietary steel grade to meet the performance requirements of horizontal drilling for 5.5” 20# production casing.

 

Executive Summary:

When tasked with delivering a high-performance product, our engineering team worked with our operations group to develop a reliable, cost-effective solution for our customers. By working with our steel providers on specific chemistries and dimensional tolerances, Tex-Isle was able to guarantee above API specifications for collapse, tensile, and burst ratings. Our operations group’s tight production control during heat treatment ensures a “first time right” of ~98% on this grade.

Continue reading

Tex-Isle Steel Market Update, July 2020

Tex-Isle-Steel-Market-Update-July-2020

Steel Market Update

In a continuation of the back and forth we are seeing across the entire economy, the domestic steel industry is struggling to find its footing. Hot Rolled Coil prices have deteriorated from their COVID recovery high of $520 per ton reached on June 11th.  Scrap prices have retreated as supply comes back online, although the price support it provided to sheet pricing has diminished. There was always an expected back and forth on prices as supply attempted to match demand, but the ~9% drop in coil prices has already claimed some as a victim. JSW Steel USA announced last week their plans to idle their Mingo Junction mill (1.5 million tons annually of HRC). The furnace was idled once earlier in the year, and had only been back online since mid-June. 

Several mills have restarted idled production in June and early July, which may lead to a further deterioration in sheet pricing if demand can not support the new capacity. Domestic mill utilization has continued to inch higher to 57.5%, but remains depressed compared to normal utilization rates. 

 

Continue reading

Tex-Isle Steel Market Update, June 2020

Tex-Isle Steel Market Update, June 2020

As the economy begins to open back up, the steel market as a whole is attempting to put a floor under prices. In May, many domestic Hot Rolled producers put through not one but two price increases totaling up to $100/ton. The first increase saw some success in bringing up prices, however the second hike has had less sticking power so far. As automotive plants have restarted for the last month or so, demand has started to pick up. Prices for domestic HRC have managed to stay close to, or above $500/ton since the beginning of the month and are on an upward trajectory. Capacity utilization in the U.S. has remained in the low to mid 50% range since May but appears to be moving up as well. USS announced recently their intent to restart production of one blast furnace at Mon Valley, JSW Steel will soon restart their Mingo Junction EAF, and there is talks from both Cleveland Cliffs and Arcelor Mittal of restarting some production to meet increasing demand from the automotive industry. This may result in short term pricing for steel as producers try to balance bringing capacity back on to meet uncertain demand.

In addition to rising demand, steel prices should feel increased price pressure from continued high scrap prices in the U.S., and a recent run up in the price of iron ore. Scrap has eased from its recent high of nearly $340/ton, but still remains high enough to cause pain for domestic steel producers. Iron ore’s recent surge is primed to cause a ripple effect globally. Iron ore futures rose up over 7% last week after Vale S.A., one of the world’s largest miners, was ordered by a Brazilian judge to shut down production at one of its mining complexes due to the large number of Covid-19 cases in the area. This complex represents more than 10% of Vale’s total production. The company is also under government scrutiny after a tailings dam collapsed in early 2019 killing over 250 people. Although Vale has maintained its previous guidance on total iron ore production for the year, the Dalian Commodity Exchange (DCE), has been forced to take measures to strengthen market regulation due to large market swings. This news coupled with the Chinese/Australian trade spat has the potential to push Asian metal prices higher.

Tex-Isle Steel Market Update, May 2020

Tex-Isle Steel Market Update, May 2020

Not surprisingly, the steel market has suffered along with the rest of the global economy. Domestic utilization of steel mills has fallen as demand from major industries has plummeted. Most of the supply reduction has come from Blast Furnace operators like U.S. Steel, Arcelor Mittal, and Cleveland Cliffs. Electric Arc Furnace mills like Steel Dynamics and Nucor usually have more control of their cost structure, but these are hardly usual times. The decrease in economic activity has resulted in a shortage in scrap available, placing a high floor under scrap prices. This higher scrap price has compacted the spread between Hot Rolled Coil and Scrap, decreasing the profitability of EAF mills. At this point, there is a question of if lower prices would result in more demand, or is it simply a dog chasing its tail? While a resurgence in demand from the energy sector should not be counted on any time soon, demand from the automotive sector should spring back as their supply chains restart. Although the big three automakers do not have a restart date planned as of yet, once they do restart the metals industry should see the double benefit of higher demand and an increase in the amount of scrap produced.

Tex-Isle Steel Market Update, February 2020

Tex-Isle Steel Market Update, February 2020

Hot Rolled Coil prices have given up some of the gains achieved over the past few months, with one of the main reasons being the continued fallout of the corona virus in China. Domestic HRC reached a high of $618/ton back on January 15th, but has since retreated back below $600/ton. In December China accounted for over 55% of global steel production, over 84 million tons, and has often been a leading indicator of the metals industry as a whole. China has already extended its original Lunar New Year holiday, and will possibly continue it until February 17th. Many non-essential companies and factories have been closed since January 24th, with the impacts starting to ripple across global supply chains. As trade into and out of the “world’s factory” slows, inputs like iron ore and liquified natural gas have suffered price contractions. The effect has been somewhat muted so far in the United States, but should the outbreak continue, companies dependent on commodity pricing stand to suffer from the downward pressure on commodities

Tex-Isle Steel Market Update, January 2020

Tex-Isle Steel Market Update, January 2020

Steel mills pushed through another round of price increases last week in a continued effort to push the price of Hot Rolled Coil above $600 per ton. Mills have announced ~$150 per ton worth of price increases since October, and have been able to bring the price up over $600 per ton from a sub $500 per ton price reached at the time of initial price increases. After the steep price drop in the fourth quarter, most of the fully integrated mills were operating in the red, while the mini mills were being hurt by the HRC to Scrap spread narrowing. Pricing was also pushed up by seasonal outages, increased demand from a restocking cycle in the first quarter, and a lack of imports into the U.S. market.

Moving forward, there is the potential for some softening in the steel market. At this time most of the normal market factors that would push pricing up have been played out in the near term. Short of sudden demand increases or interruptions to supply, a price ceiling has most likely been reached. Of note, as of Tuesday the CME Hot Rolled Coil futures curve is downward facing for the remainder of the year.

 

Continue reading

Tex-Isle, Inc. Launches New Website

Tex-Isle, Inc. Launches New Website

Tex-Isle, Inc. is proud to announce the launch of our new company website. Within the new site, users can browse our Distribution, Manufacturing, and Engineering divisions, get in touch with us, and also stay up to date with the latest company news and offers. Please visit the new website at http://www.texisle.com/.

Contact Us

Please enter your name.
Please enter your email address.
Please enter your phone number.
Please enter your message.
Invalid Input