Nucor Increases RMS for Scrap-Linked Sheet Deals by $190/ton

Nucor has increased the raw materials surcharge (RMS) for customers buying steel sheet on terms linked to scrap prices.

The Charlotte, NC-based steelmaker said its RMS – based on prices for busheling scrap – would be $515 per ton ($25.75 per cwt) in April, a $190-per-ton increase from prior levels.

The higher RMS will be applied starting with orders scheduled to be delivered the week ending April 9. And it will remain in effect through April 30, the company said in a letter to customers dated Monday, March 21.

Nucor had already announced significant price increases for other sheet customers buying on terms not linked to scrap prices. Those customers have seen three increases totaling $275 per ton over approximately the last month.

Nucor’s higher RMS surcharge comes after ferrous scrap recorded what might be its biggest month-over-month gains ever in March. And higher scrap prices are expected again next month on the back of increased pig iron and slab costs stemming from the war in Ukraine.

Russia, Brazil and Ukraine had been the primary pig iron suppliers not only to US EAF sheet mills but to EAF sheet mills in Turkey and other regions as well. Ukrainian cargoes have been effectively stopped because of the war. Some customers are reluctant to buy Russian material but have few alternatives because Brazil alone cannot fill the gaps left by the fighting.

That matters when it comes to prime scrap prices because imported pig iron was previously a reliable way for mills to keep a lid on scrap tags.

A similar situation is playing out on the slab side. US mills have relied heavily on Brazilian slab since Brazil agreed to a quota in exchange for exemption from Section 232 tariffs of 25%. But there is a limit to how many tons Brazil can supply to the US and the EU, both of which have seen sharply higher steel prices as a result of the war in Ukraine.

By Michael Cowden, Michael@SteelMarketUpdate.com