Steel Mills

HARDI: Optimism Prevails Despite Price Drop

Written by Becca Moczygemba

Galvanized prices continue to drop, as discussed during this month’s call of the Sheet Metal/Air Handling Council of the Heating, Air-conditioning & Refrigeration Distributors International (HARDI). Prices have been steadily dropping for the past six months despite stable demand.

HARDIA few highlights from the call include the differential between hot-rollled and cold-rolled coil being in the $300 per ton range, negotiations between the United Steelworkers union (USW) and US Steel having not yet been settled, and the International Trade Commission revoking the antidumping/countervailing duties on hot-rolled steel from Brazil, though Brazil is still limited by a Section 232 quota.

“What we’ve found is that the demand curve is a leading indicator, or precedes and pretty much mirrors, what the lead times do, and as we’ve already indicated lead times are an indicator for prices,” stated Dave Schollaert of Steel Market Update. “Overall, what we’re seeing is that demand is still trending down.”

Despite the current circumstances, HARDI members seem to maintain an optimistic outlook. One HARDI member noted that they are still seeing a stable demand and relatively normal inventory levels. Another member noted that demand looks stable through February as inventory levels are being maintained, which seemed to be the consensus overall.

One participant discussed a recent article that pointed out an 80% correlation in pricing between Chinese iron ore and Chinese steel pricing and about a 90% correlation between Chinese steel prices and US steel prices. “Essentially, if Chinese steel prices go down, then US prices can be expected to go down,” he stated. Additionally, there was some speculation that 2023 prices will mimic those of 2019.

The results of a snap poll conducted at the end of the September call revealed that 66% of participants said galvanized prices will be flat +/- $40 per ton ($2/cwt) in the next 30 days. 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 on where prices for galvanized would be over the next 12 months, 52% predicted 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.

That same poll was taken at the end of this month’s call and results disclosed that in the coming month,  20% believe galvanized pricing would be down more than $4/cwt, 28% thought it would be down more than $2/cwt, and 52% believed it would be flat (+/-$2/cwt).

In the next six months, 20% foresee pricing being down more than $6/cwt, 24% believe it would be flat, and 36% think it will go up more than $2/cwt. The majority of poll participants believe pricing will stay somewhere between $40–60/cwt in the coming year, with 40% voting for the $40–49/cwt range, 44% selecting the $50–59/cwt range, and 16% choosing the $60–69/cwt range.

Steel Market Update participates in a monthly steel conference call hosted by the Heating, Air-conditioning & Refrigeration Distributors International (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.

By Becca Moczygemba,

Becca Moczygemba

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