Have US HDG prices finally bottomed?

After a weeks-long downtrend, US HDG prices seem to have finally bottomed. Last week, sources reported that the average ex-mill base-price HDG transaction price was hovering in the range of $30-$32 cwt. ($661-$705/mt or $600-$640/nt), although some sources reported making buys at “slightly below that range.”

This week, source note, mills are quoting base price HDG at $35 cwt. ($772/mt or $700/nt), “which we all know is a bunch of hogwash,” a source added. “At this point, the $30 cwt. and below numbers seem to be gone. Although it’s too soon to tell where the market will settle, we’re guessing it will be in the $32-$33 cwt. ($705-$728/mt or $640-$660/nt) range.

A second source agreed. “There is no reality in which people are going to pay $35 cwt. for [HDG coil] right now,” he added. “Lead times are trending at 5-6 weeks and I just don’t see enough strength in the market to see prices going up in the next two weeks. I think the lowball deals are gone, for sure, but $35 cwt.? No way.”

Also of note is news that ArcelorMittal East Chicago plant, which produces HDG coil, has announced it’s laid off nearly 900 workers. According to the mill’s VP and general manager Wendell Carter, the layoffs are attributed to the pandemic. “Many of the company’s customers closed their operations due to the COVID-19 pandemic,” Carter wrote in a notice to the state. "Despite their reopenings, business conditions continue to be depressed during the pandemic, with no significant improvement in demand for the products we manufacture foreseen in the near term."

The company also announced layoffs of 454 workers at its Cleveland, Ohio facility last week.

Current HDG and Galvalume coil pricing is listed in the chart below.