Steel Mills

HARDI Members Remain Optimistic, Foresee Stability Ahead

Written by Becca Moczygemba

Hot rolled and galvanized prices continue to decline but many continue to go unchanged, members said during this month’s call with HARDI’s Sheet Metal/Air Handling Council. Much like July, members are currently seeing strong demand and foresee stability in the near future.

HARDIIt’s been an eventful month to say the least. Nucor and Cleveland-Cliffs both announced price hikes, as did NLMK. The spread between hot-rolled and cold-rolled is close to $400 per ton. Labor negotiations are still pending with US Steel and they have upcoming outages scheduled. Overall, HARDI members agree there’s no concern for project cancellations at this time.

“Demand seems to be strong through the end of the year and even into the first quarter for us and that’s primarily non-residential commercial,” said one wholesaler. “We’re seeing single housing residential slowing down a bit, multi-family is still pretty good.”

Inventories are balanced according to those on the call, with the dynamic stretching into the end of the year. “We’ll try to trim that down a little bit but on our end everything looks pretty good,” he said.

“As far as prices go, I fully anticipate as we get into the fourth quarter, mills will have some downtime for maintenance and I suspect that those will all come together and put a little bit of a floor under what we’re seeing,” a HARDI member said.

July’s end-of-meeting poll revealed that 32% thought galvanized would be down more than $120 per ton ($6/cwt), 32% thought galvanized would be down more than $80 per ton ($4/cwt), and 29% believed galvanized would be down more than $40 per ton ($2/cwt). When comparing numbers from the end of July to the end of August, galvanized decreased by about $110 per ton ($5.50/cwt).

Fortunately, one member reported that they have seen a drop in transportation costs. Although there were reports of inventories being a little bit higher than the 55-day average, it does not necessarily cause concern.

“With lead times we need to keep [inventories] a little bit higher than that so we keep a healthy inventory in stock for our customer base. So far, we’re not seeing any delays from mills,” noted one participant. Additionally, the chatter of pricing leveling off sounded promising.

There was some question regarding spot buys, but it appears that customers do not have as much urgency as they previously have. The consensus is that business is steady, and though they expect a slight price increase in September, we’re entering calmer waters. Those on the call believe stability is good for the marketplace and that the mills will support that.

The results of a snap poll conducted at the end of the call revealed that 66% of participants said in the next 30 days, galvanized prices will be flat +/- $40 per ton ($2/cwt). Another 38% said galvanized would be up more than $40 per ton ($2/cwt), while 24% believed that it would be down more than $40 per ton ($2/cwt).

When polled where prices for galvanized would be over the next 12 months, 52% predicted that galvanized prices will be $1,200-1,380 per ton ($60-$69/cwt), 24% said $1,400-1,580 per ton ($70-79/cwt), and 21% believe prices will settle somewhere in the $1,000-1,180 per ton ($50-$59/cwt) range.

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 and wholesalers who supply products to the construction markets. Also on the call are service centers and manufacturing companies that either buy or sell galvanized sheet and coil products used in the HVAC industry and are suppliers to the HARDI member companies.

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By Becca Moczygemba,

Becca Moczygemba

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