HARDI Members Seeing Stronger Demand

On the West Coast, Midwest and Southeast we heard similar comments. One of the Southeast wholesalers reported, “We had a good April, May and now June. We have seen a slip [in pricing] at the mill level but, we haven’t seen a change in the attitude on the street.”

A large galvanized service center which is also a HARDI member told the group that they look at the market in three ways: short term, medium term and then the longer term view.

In the short term, they reported galvanized steel prices as “definitely softening” with most of the softening coming from mills other than ArcelorMittal, US Steel and AK Steel. “Construction based coaters and converters are where you are seeing the softening,” is how this service center described the market to the HARDI wholesalers.

He also reported that the market is very product specific and regional right now. “Cold rolled in the Mid-Atlantic is different than galvanized 60″ wide coil in the Midwest.”

The service center reported that the short term is seeing holes in inventories which is making the spot market quite robust.

Over the mid-term, the issue of raw material input costs, such as iron ore which late last week was trading on the spot market in China in the low $90’s as opposed to $120’s, along with imported steel will pressure the market and market pricing.

Longer term, there are two main issues which are of concern to this service center and many of the HARDI wholesalers. The threat of trade cases against galvanized steel and the myriad of transportation issues which are plaguing the steel industry.

A number of comments expressed the sentiment that we are close to the bottom of the cycle. “How much do we have left to fall. I don’t think there is much left in this cycle,” is what one HARDI member reported to the group. He went on to say, “If you are waiting for prices to fall before buying up, you probably are not going to get that fall.”

Competition continues to be an issue in all areas east of the Rocky Mountains as service centers sell material at less than what they should be getting (in the wholesalers view) in the marketplace. This has been an issue for a number of months and prices rising or falling doesn’t seem to make it go away.