Steel Mills
HARDI Members Report Galvanized Base Prices Up $20 per ton
Written by John Packard
July 29, 2014
Once per month, HARDI sponsors a conference call for those HARDI members who are involved with the sale and distribution of galvanized steel to the HVAC and related industries. Steel Market Update participates in these calls along with wholesalers around the United States and Canada.
Since the last HARDI conference call we have seen a major move in the consolidation of the steel industry with Severstal North America selling their Dearborn and Columbus plants to AK Steel and Steel Dynamics. One of the service centers on the conference call said the sale is a “game changer” for the industry with an expectation that the domestic steel mills will be “more disciplined” in their approach to galvanized steel pricing.
The second item of importance was the issue of possible trade cases affecting galvanized steel suppliers. The expectation is for any new cases on cold rolled and coated would be placed by early September but no one is quite sure of any specific dates and the group could only rely upon speculation from its members.
A third item of concern was the recent run-up in zinc spot prices with the metal trading close to $1.10 per pound (prior to any premiums). This level is quite close to where the metal was trading when the existing coating extras were announced.
What we discovered out of today’s call was the wholesalers are reporting steel mill pricing as $20 per ton higher than it was one month ago. One wholesaler told the group, “We cannot buy anything at any mill at the same price we placed business one month earlier. Prices are $1 to $2 higher.” They went on to report July 11th as the cutoff date for their old pricing versus the new prices.
US Steel announced spot prices as being $25 per ton higher as of June 30th. Most of the domestic mills were quiet for the holiday week until Severstal NA floated $820 per ton cold rolled and galvanized base prices and a little later in the month Nucor verbally told their customers they were looking at moving up $25 per ton.
So, at least with the wholesalers who responded to questions in today’s conference call, prices are up at least $20 per ton.
Demand levels were discussed with many of the wholesalers admitting that business conditions have improved but “not overwhelming” in the Midwest. The East Coast wholesalers advised that business had slowed over the past few weeks but their customers were advising that they expected stronger business conditions later in the 3rd Quarter.
One of the service centers who supplies many of the wholesalers as well as service centers around the country reported their spot business as strengthening as service centers begin to develop holes in their inventories. “We are seeing holes in the service center industry. However, it has been slow to develop. Lead times are still short and distributors can sometimes wait for delivery.”
Transportation issues continue to hamper shipments due to a lack of drivers. The HARDI members were encouraged to work on their trucking relationships, how those bills are being paid, etc. “It doesn’t appear that this is going to improve anytime soon,” is what one of the service centers reported to the group.
SMU Note: HARDI = Heating, Air-conditioning, Refrigeration, Distributors International.
John Packard
Read more from John PackardLatest in Steel Mills
USW seeks clarity on plans for Granite City Works
The United Steelworkers union has asked U.S. Steel to elaborate on its Granite City Works plans following reports that the steelmaker is ending processing at the facility.
Nucor maintains plate prices, opens October order book
Nucor aims to keep plate prices flat for a seventh straight month with the opening of its October order book.
ArcelorMittal Mexico to import from sister mills as it works to resume DRI production
ArcelorMittal has partially restarted operations at its direct reduction plant in Lazaro Cardenas, Michoacan. An explosion on Aug. 18 rocked the massive steelworks on Mexico’s Pacific coast, impacting production of direct-reduced iron (DRI).
Fall maintenance outages are coming in hot
Labor Day has passed, the sun is starting to set a little earlier each day, and cooler weather has begun to find its way down to many of us across North America. And you know what that means for the steel industry… Fall maintenance outages!
AISI: Domestic steel production ticks up
US raw steel production ticked up in the week ending on Sept. 6 after a decrease the week before, according to the most recent data from the American Iron and Steel Institute (AISI).