Galv buyers less optimistic about short-term market

Each month, SMU joins the council’s meeting to discuss the galvanized sheet market. Participants — members of Heating, Air-Conditioning & Refrigeration Distributors International (HARDI) — are wholesalers, service centers, distributors, and manufacturers who buy or sell galvanized steel.

“It was a little more of a seller’s market as contractors seemed to be protecting themselves against a potential run-up in prices, but a lot of the fundamentals that did set the price or factor into the price are pessimistic fundamentals,” he said.

Another buyer echoed those sentiments, saying they’ve seen “demand pull back in terms of steel pounds sold this month.”

The first three months of the year were above average as people rushed to buy, he noted, but May has been below average.

“There are a lot less inquiries, too, so some of that pre-bought material is starting to affect our demand, he said. “Supply side is still very loose.”

He said service centers and mills have been willing to negotiate and you can get product in pretty quickly, so inventories can be a little leaner.

A third buyer said, “We’ve experienced probably similar to most on this call, but I have seen activity start to recover back from when we saw a noticeable pullback right after the reciprocal tariffs were announced in early April.

He said strength in their OEM customer base is balancing out the demand that’s been off in the HVAC market.

“We’ve seen that fairly mixed in the market, depending on the region, and probably partially due to the pull forward of jobs and orders earlier on in the cycle,” the third buyer said.

“We’re certainly seeing some softening out in the market, as others have referenced, but not what we would call blood in the streets or anything like that,” he added. “Service centers are still receiving their highest costs into their inventory this month and into next month. And I think inventories are fairly lean, so I think the combination of those two things are balancing out the supply chain a little bit from a pricing impact standpoint on the street.”

Looking ahead

In an informal poll on the direction of prices, a solid majority of 65% expect galvanized prices to be down more than $2 per cwt over the next 30 days, followed by 15% predicting sideways.

Over the next 60 days, predictions are more mixed with 40% expecting flat; 20% predicting down more than $6/cwt and 15% predicting down more than $2/cwt. About 20% see prices rising more than $2/cwt.

SMU’s average galvanized price stands at $1,015 per short ton as of Tuesday, May 20. That’s off $5 from the previous week.

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 HARDI member companies.