US HDG prices steady, market takes “wait and see” approach

US domestic hot dipped galvanized steel prices are mostly steady since our last report a week ago, yet while some sources have indicated that demand has shown “modest improvement,” others say activity is “hardly robust.”

"It's mostly dead," a source said. "It's better than it has been, but no one is giving each other high-fives based on where demand is."

As far as where things go from here, the state of the market in the weeks ahead remains largely “to be determined.”  For example, a variety of US flats mills, which had taken blast furnaces offline due to crashing demand at the start of the COVID-19 pandemic in the US, have announced plans to resume operations. “A lot of us are wondering whether mills will show some restraint, or if they’ll open things back up and ‘let her rip,’ which could dump way too much steel into an already distressed market,” a source said.

And while economists are slightly less pessimistic in their US employment outlook, it’s still believed that the average unemployment rate in Q2 of this year will hover at 13.4%.

“There are a lot of factors that are going to play into where the HDG market is going,” a source said. “This includes everything from mills’ restarts, how demand is doing and what’s going on with [the coronavirus.] We’re at a point where it’s really hard to make long-terms plan because everything can change on a dime.”

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