US HDG prices shoot upward

US domestic hot dipped galvanized and Galvalume coil prices have spiked, as better-than-expected demand is allowing mills to have the upper hand.

“I think if you were to go back 5 weeks and predict that prices would hit the level that they’ve hit today, no one would have taken that bet,” a source said. “But we are where we are.”

The reason for the runup on flat rolled steel prices, including US HDG prices, is linked to “unbalanced supply and demand,” another source added. “Summer buying was slow, which is nothing that’s out of the ordinary, and when [buyers] came back into the market, and saw that scrap had started to rise, they realized they’d taken their inventories a bit too low.  There’s also the outage at Big River [Steel], which has led to some tightness within the market. For now, the capacity utilization rate is below 66% and the mills have the upper hand. They’re going to get prices up as high as they can, as fast as they can, and do everything they can to keep it there for as long as they can.”

The question as to whether higher prices are sustainable has yet to be answered, but it’s SteelOrbis’ position that the runup on prices following mills' recently announced price increases is directly linked to inventory restocking, not a marked jump in end-use demand.

Another source agrees, noting that while North American light vehicle production is almost back to pre-COVID levels since July, “automotive alone can’t support higher prices in the long-term. Higher prices are here for now, but the question is how long it’s going to last.”

Today's prices are listed in the chart below.