Steel Mills
ArcelorMittal Hikes CR & Coated by $30
Written by Tim Triplett
August 14, 2018
Mills historically have enjoyed a healthy price premium for cold rolled and galvanized products over hot rolled, at times reaching as high as $220 per ton. More recently, due to the tight supplies of hot rolled, the differential has dipped as low as $80 per ton, prompting at least one mill to act.
ArcelorMittal USA notified customers today of a $30 per ton price increase on its tandem-mill-produced sheet products. The announcement affects cold rolled, hot-dipped galvanized, Galvalume and electrogalvanized sheet, effective immediately on all new orders and recent quotes that have not been accepted with AMUSA or AMNS Calvert.
During a webinar hosted by the CRU Group today, CRU analyst Josh Spoores noted that the spread between hot rolled and cold rolled/galvanized has averaged $110 per short ton since 1980.
“Certainly, [the spread] has gotten more volatile in the last few years,” he said. “The hot rolled supply is a little bit tighter than other products because of the situation with OCTG imports and the quota on Korea, which is a major supplier. The way we look at it, the spread is going to levitate back toward the $120 per ton level. It’s just a matter of how quickly.”
He estimates the current spread between hot rolled and galvanized at around $86 per ton. With the price of zinc down around $1.12 per pound, from recent highs above $1.60, the price of galvanized is at risk of declining in the near term, he added.
Tim Triplett
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