Steel Buyers Basics: Galvanized and Galvalume Coating Costs

Recently Steel Market Update produced information related to the changes in the LME spot price for zinc and the costs associated with applying the Zinc to steel substrate in order to make galvanized product.  It has been normal for the domestic steel mills to react to significant adjustments in the cost of zinc by adjusting their coating weight extras. US Steel did this as recently as April of this year.

However, this adjustment doesn’t happen all the time, only when the spread (up or down) puts either the mill or their customers (who can buy products overseas) at a competitive disadvantage.  Also Mill extras tend to be “sticky” – if an adder was $6.80 and was raised to $8.20, then when the adder is reduced the Mill tends to drop back to $6.80 and doesn’t move it to an in-between number.  The domestic mills publish their extras in their price books and Steel Market Update has them on their website so buyers can compare one mill against another (as the extras may vary from mill to mill).