US steel market keeping watch of logistics issues in wake of Hurricane Ida
No US steel mills were in the direct path of Hurricane Ida, though sources in the steel market were assessing potential impacts Aug. 30 as utilities were downed by the storm and logistics were expected to be affected in Louisiana and beyond in its wake.
The storm made landfall as a Category 4 hurricane on Aug. 29, about 100 miles south of New Orleans, near Port Fourchon.
Freight rail and trucking in the region remained a concern and it was too soon to tell Aug. 30 how the storm would impact barges in transit, both inbound and outbound from the port of New Orleans, sources said.
A total 1.04 million st of steel products were imported into the port of New Orleans in 2020, in addition to 3.51 million st of iron products and ferroalloys, according to data from the American Iron and Steel Institute.
The port of New Orleans is also a hub for steelmaking raw materials, particularly pig iron, with 2020 pig iron imports totaling 2.61 million st and iron and steel scrap imports at 378,905 st, according to the AISI.
Port NOLA said crews were still assessing Hurricane Ida impacts the afternoon of Aug. 30 as cargo operations remained closed, according to a statement.
“Initial reports indicate no major damage to our facilities,” Port NOLA said. “We are coordinating with navigation partners as well as local and state officials so we can resume operation safely and as quickly as possible.”
A steel trader said he expected the port to remain closed for about a week and it would take 10 to 15 days for operations to go back to normal following the storm.
Issues at the port could add further complications to an already tight steel market and cause delays in deliveries of imported steel products. US hot-rolled coil prices continued setting fresh all-time highs due to steady demand combined with tightly supplied market ahead of a series of planned outages in the fourth quarter.
The S&P Global Platts TSI US hot-rolled coil index was calculated at $1,938.25/st EXW Indiana Aug. 30, up almost 100% year to date. With record-high prices, domestic mills started negotiations of index-linked contracts with minimal discounts, full freight and extras. Mills already entered contract season with a firmer stance and any supply-chain bottlenecks might serve a threat to the bargaining power of buyers.
“With the surge, barging will be very difficult,” the trader said.
On the raw materials side, Nucor’s Louisiana direct reduced iron facility was proactively shut down prior to Hurricane Ida making landfall, a spokesperson for the company said Aug. 30.
“Our Nucor teammates and their families are safe and the DRI plant did not sustain any major damage from the storm,” Nucor spokesperson Katherine Miller said. “We expect to resume operations in the coming days when we determine it is safe to do so given the storm’s impact to the region as a whole.”
Nucor’s Louisiana DRI facility, located in St. James Parish, has an annual capacity of 2.5 million mt/year.