Steel Products Prices North America

SMU Hot Rolled vs Galvanized Price Spread Analysis

Written by Brett Linton

May 22, 2022

The relationship between hot rolled and galvanized steel prices has fluctuated sharply over the last eight months, with galvanized selling anywhere between a $195-545 per ton premium over hot rolled in that time. The premium reached a record high in February, but then quickly dialed back in March as prices shot up in response to the war in Ukraine. Since early April, the premium has gradually declined each week.

SMU’s hot rolled coil price averaged $1,350 per ton ($67.50 per cwt) last week and has declined each of the past four weeks. Recall our index had reached a 14-month low of $1,000 per ton in the first week of March, following a record-high $1,955 per ton in September 2021. Our latest galvanized price index averaged $1,725 per ton ($86.25 per cwt) last week and has also decreased for the last four weeks. Galvanized prices peaked at $2,185 per ton last September and fell to a 12-month low of $1,420 in early March.

As shown in the graph below, galvanized held a premium between $80-220 per ton over hot rolled for the last few years, exceeding that range in late 2021. Recall the premium rapidly rose to a peak of $545 per ton in mid-February, falling almost as quickly thereafter to reach a low of $300 per ton on March 22. The spread last week was $375 per ton, a six-week low.

To better compare this price spread, we graphed the galvanized price premium over hot rolled as a percentage of the hot rolled price. This is an attempt to paint a clearer comparison against historical pricing data. As shown in the below graphic, the percentage premium is not as alarming compared to the dollar value premium. Galvanized prices held an average premium of 24% above hot rolled prices from 2017 through the end of 2021. 2021 averaged just 13%, while 2022 YTD now averages a 33% premium through last week. The premium rose to a record high in mid-February 2022 of 50%. The latest spread has softened to 28% and has been roughly in that ballpark for the last seven weeks.

By Brett Linton, Brett@SteelMarketUpdate.com

Brett Linton

Brett Linton is a senior analyst for Steel Market Update, where he began his career. Linton has been in the steel industry since 2010. He has held roles as a category manager and strategic insights director at Reibus before returning to SMU in 2024. He is a graduate of The University of North Georgia with a degree in Finance and Accounting. Brett can be reached at brett@steelmarketupdate.com or 724-314-0179.

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