HARDI Members Hopeful for Strong 2019

The distributors of galvanized steel products have seen prices slide by about $5/cwt since earlier this year and nearly $1/cwt in the past month. The Oct. 10 price increase announced by the major steel mills has not been supported by the market, leaving HARDI members to wonder if the value of their inventories will continue to erode. Steel Market Update moved its Price Momentum Indicator to Lower this week on the expectation that prices will decline further in the next 30-60 days. “We think there will be continued deflation over the next 30 days, but then we will start to see rumblings of a decent increase as we get closer to year end,” predicted one HARDI member.

The Sheet Metal & Air Conditioning Contractors’ National Association—the trade group representing HARDI members’ customers—reports that market demand for HVAC system design, fabrication and installation is still strong. SMACNA members have strong backlogs of work that should keep them busy well into next year. Rising steel prices have not caused project delays as many feared. The predicted slowdown in construction in 2019 is not likely to really impact the HVAC market until 2020, the group believes.

HARDI members all reported stable demand in their regions of the country, although they expect activity to slow during the winter holiday season. Some took a slightly bigger inventory position on the mill price announcement last month, anticipating that prices would increase. “Everything is looking great for 2019. I just hope we don’t have a bunch of steel that is priced too high,” said one member, expressing a common regret.

Added another distributor in the Pacific Northwest, who reported softening transaction prices and an inventory that is a bit heavier than desired moving into a slower period of the year: “Like everyone else, we are trying to balance out what steel prices will do, but it looks like 2019 will be another strong calendar year.”

Steel Market Update participates in a monthly steel conference call hosted by HARDI. The call is dedicated to a better understanding of the galvanized steel market. The participants are HARDI member companies who are wholesalers, service centers and manufacturing companies that either buy or sell galvanized sheet products used in the HVAC industry.