It’s been less than two weeks since US domestic flat rolled steel producers announced a sweeping round of price increases. However, despite mills’ strong desire to push prices upward, coated steel products remain the weakest product in the US domestic flat rolled market. Prices for US HRC and CRC have increased, modestly, since the increase annoucement, but domestic coated steel product pricing remains soft
“All of the galvanized lines have still been operating, which means that there’s plenty of material out there. The softness of galvanized pricing ties into too much supply and not enough demand,” a source noted.
Yet while some question whether steel buyers could stomach another increase so soon after the first, there are some bright spots in the market. For example, US automakers have begun to resume production, with Hyundai and Kia resuming their US manufacturing lines last week. General Motors employees in Michigan will likely return to work next week, and it’s further believed that Tesla will resume construction at its Freemont, California-based plant “sooner than later.”
As for the HVAC industry, one source said it’s “still robust with their order activity.” A third source added that mills’ significantly reduced capacity utilization rates, coupled with higher domestic scrap prices during this months’ buy cycle, could all be setting the stage for a second round of price increase.
Whether the increase is about moving flat steel prices solidly upward, or based on a strategy of pushing the first increase into acceptance, is still up for discussion among market players.
Yet despite mills’ eagerness to put a floor on prices, it seems that the previous increase has not had the desired effect. For now, the coated steel market is steady, albeit plagued by oversupply.
This week’s domestic HDG and Galvalume spot market prices are listed in the chart below.
Product | $/cwt | $/mt | $/nt | Delivery | Weekly change |
US domestic HDG base price | $32-$34 | $705-$750 | $640-$680 | ex-mill | Neutral with deals of up to $1.50 cwt. |
US domestic Galvalume base price | $32-$34 | $705-$750 | $640-$680 | ex-mill | Neutral with deals of up to $1.50 cwt. |
0.019x41.5625 Gr80/AZ55 | $42-$44 | $926-$970 | $840-$880 | ex-mill | neutral |