Buyers say galv prices stable mill level but stuck in swamp on the street

SMU Managing Editor Michael Cowden joined this month’s virtual discussion on Tuesday, Sept. 24.

Galvanized sheet prices

The call moderator opened the meeting by noting that prices for galvanized sheet steel have been mostly stable since last month’s meeting. If anything, prices inched higher, rising ~$1 per cwt, or ~$20/short ton, he commented.

Indeed, SMU’s interactive pricing tool shows galvanized base prices averaging $920/st ($46/cwt) as of Sept. 24. This was a monthly increase of $15/st ($0.75/cwt), or less than 2%. After bottoming in late July at $870/st, prices have since risen $50/st, or 5.7%.

The market remains stuck “in a wait-and-see mode,” as one buyer put it. There are some fundamentals in place for higher steel prices, he remarked. But lackluster demand, high inventory levels, and excess supply are driving uncertainty and keeping prices in check.

“This inventory in the system is really what’s keeping a lid on prices,” according to another buyer. He said there are plenty of players with high inventories “all fighting for the same orders right now.”

However, some participants reported increased service center activity and inventories falling below the two-month mark, which they saw as positive indicators of a coming restocking.

While prices are firming at the mill level, the “street level is still pretty swampy,” noted one HARDI member, referring to the market conditions discussed on last month’s call.

Most call participants (58%) predicted galvanized base prices will be mostly flat (+/- $40/st) for the next month. Still, 17% anticipate a rise of at least $40/st, and 25% said the increase will be at least $80/st.

One buyer likened current market conditions to fighting in wet, muddy trenches. He predicted there won’t be any significant price movement until at least the first quarter of next year.

Most buyers present agreed with the prediction: 50% thought prices would be at least $40/st higher than current levels by the end of March, and 33% said they’ll be more than $120/st higher.

Another purchaser expressed that this relative price stability would likely continue for the next few months. That is, “absent any type of black swan event, whether … a major port strike or a trade case or an outage or something that we’re not even talking about,” of course.

Buyers watching CORE trade case and BF idling

Call participants also talked about the impacts of the filing of a trade case against coated sheet imports earlier this month.

It’s already impacting the market, having “put the brakes on some of the interest and foreign inquiries on galv in particular,” said one buyer.

Another member disclosed that his company is seeing increased orders from what are typically offshore buyers, driven by “fear of the impending tariffs.” He speculated this would spur activity at domestic mills and fill their order books, pushing lead times out and prices higher.

Also of note, the call moderator mentioned the upcoming hot idling of a blast furnace by Cleveland-Cliffs. Noting the furnace’s annual capacity of over 1.5 million st (or 4,150 st per day), “That is not insignificant,” he commented. “I guess that is a reflection of lackluster demand.”

SMU participates in a monthly steel conference call hosted by HARDI and dedicated to better understanding the galvanized steel market. The participants are HARDI member companies, 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.