Nucor to Adjust Fuel Surcharge More Often as Prices Balloon

SMU has seen matching letters from the company’s tubular products and plate groups. It is possible that other divisions have already or will send out similar letters.

Nucor currently passes along fuel surcharges – based on guidelines from the U.S. Department of Energy (DOE) – at the beginning of each month.

The new mechanism will work like this: The DOE adjusts its fuel surcharges every Monday at 4 pm. Nucor will distribute that updated fuel surcharge on Wednesday. And the new surcharge will become effective on Sunday. That process will repeat every two weeks.

Nucor is not the first domestic steelmaker to have increased fuel surcharges.

NLMK USA, for example, on Feb. 24 increased fuel surcharges from 35% to 37% effective with all shipments on March 1. The company said the move was due to volatile pricing and was based on the national average price for diesel.

Oil prices – a big component in the cost of fuel – shot to more than $100 per barrel after Russian forces invaded Ukraine on Feb. 24. The war in Ukraine has led to various sanctions and trade restrictions aimed at Russia, one of the world’s largest oil producers.

Increased fuel costs are among a host of factors driving prices higher.

A few examples: March saw the biggest ever month-over-month scrap gains. SMU recorded its largest ever week-over-week increase in sheet prices on Tuesday. And Nucor’s sheet mill group on Wednesday announced a sheet price hike of $125 per ton – bringing the company’s total announced price hikes since late February to a combined $275 per ton ($13.75 per cwt).

By Michael Cowden, Michael@SteelMarketUpdate.com