Steel Products

HARDI Steel Conference Call Reports Prices Back to Pre-Announcement Levels

Written by John Packard

The HARDI wholesalers who participate in the distribution of galvanized steel into the HVAC industry held their monthly conference call this morning to discuss the steel market. At the time of the last call held in late January, AK Steel had just announced a $40 per ton price increase and the HARDI members were waiting for the rest of the domestic mills to follow.

Since then, the rest of the mills came out with increases which essentially were aiming at collecting a $38.00/cwt base price on galvanized steel. The HARDI wholesalers reported this morning that none of the price increases had “stuck” and the domestic mills were essentially collecting prices at the levels seen just prior to the AK Steel announcement.

One furnace pipe manufacture told those on the call, “The domestic mills are trying to hold it [base prices] at the low end [of the range]. They realized it was the wrong time for a price increase.” He went on and pegged the base price level at “$34.75 to $35.50 per hundredweight [cwt].”

A large galvanized service center who participates in the monthly calls complimented Steel Market Update on our neutral rating over the past nine weeks [actually we are now in our 12th week] and went on to say the mill order books are currently “leaning toward softening.” He went on to report the CRU index was, “hovering in this high $35 low $36 range and, there doesn’t seem to be anything in sight that is going to change that. So, we’re in somewhat of a holding pattern right now. Again uncertainties are the common theme in the marketplace. We’ve said it is hard to run our business with all this fluctuations and peaks and valleys. And look what’s happening now – we have stability and now we are all scratching our heads and wondering what to do.”

A wholesaler out of the southeast echoed that statement and reported, “…things are starting to crumble. I think if a mill would announce a price increase now they would have no basis…I don’t think you can announce a price increase with lead times of four weeks and it keeps sliding.”

The group also spent time discussing demand as one of the members questioned why they were articles about increases in residential and commercial construction yet they had not seen evidence of it in their order books. The wholesalers responded that their businesses were “cautiously optimistic” that there would be more business in the HVAC markets as we work into the later part of the year – however, their business tends to be “later in this new construction.” They have to wait for walls and roofs to be on buildings before the HVAC ductwork and equipment is installed.

HARDI = Heating, Air-conditioning, Refrigeration Distributors International.

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