Did the US flats increase push HDG prices higher?

On Friday, US domestic flat rolled steel producers announced a sweeping round of price increases, with mills stating they’d be raising prices on all flat rolled steel products, including US domestic HDG / Galvalume coil by $2.00-$3.00 cwt. ($44-$66/mt or $40-$60/nt), depending on the mill.

Yet despite mills’ desire to “stop the bleeding,” it seems that prices have yet to move up as sources continue to report that customers are still wary and reluctant to buy.

That wariness ties into several different factors. First, AISI has reported that for the week ending May 2, 2020, domestic raw steel production fell to 51.1%, compared to 55.8% the previous week and 81.2% in the same week of 2019.

Second, a key coronavirus model has been revised to project 134,000 deaths in the US, which is nearly twice as high as the model’s last estimate. Relaxed social distancing and increased mobility within states that have moved to ease stay-at-home restrictions, in an attempt to restart the economy, are attributed to the revision. Some SteelOrbis sources have expressed concern that if the “floodgates are opened too soon and everyone jumps back into the saddle, and there is another spike in infection rates, that any short-term recovery that the steel market might see could be short lived.”

For now, the US domestic coated steel market is steady. Contract business remains good, sources note, although spot market business “is relatively terrible.”

This week’s domestic HDG and Galvalume spot market prices are listed in the chart below.