SMU's Week in Review: May 19-23

Buyers of galvanized steel have a dimmer outlook for the market for the next several months, according to this month’s Heating, Air-Conditioning & Refrigeration Distributors International call. In the last 30 days, the base price of galv has dropped by more than expected while demand is softening.

“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,” one buyer said.

The ferrous scrap market in the US looks somewhat uneventful for June so far. The May market settled down ~$30 to $50 per gross ton in May, with US mills having no trouble securing enough material amid ample supply. But, will resumed export activity cut into domestic supply? Here’s a look at how things are shaping up.

On the aluminum side, here’s a look at the case for banning exports of used beverage containers, a key recyclable material. One argument in favor of a ban is that with the US recycling rate struggling at 43%, we can ill-afford to let what little we’re collecting to leave the country. But there’s more to it than just that, as our sister publication Aluminum Market Update explains.

Prices

Most sheet and plate prices edged lower again this week, albeit at a slower pace compared to the movements seen over the last seven weeks. Buyers are cautious about holding onto much inventory, citing lingering concerns over demand. And, of course, the word that is on everyone’s bingo card these days – tariffs. Hot-rolled coil was the only product that did not move this week, holding at $845 per short ton (st) and breaking its three-week decline streak.

Nucor has lowered its consumer spot price by $20/st, marking the third consecutive weekly decrease.

Cleveland-Cliffs opened its June order book for spot material at $910/st. That’s down $65/st from May, when it opened its books at $975/st.

Notable quotes

A buyer from the HARDI call: “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. 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.”

An executive on steel tags: “Prices are trending down. And it seems pretty clear to me that tariff uncertainty started this lull in activity and continues to slow business.”

Upcoming events

SMU Community Chat
Barry Zekelman, executive chairman and CEO of Zekelman Industries, will be the featured guest on our next Community Chat on Wednesday, May 28, at 11 am ET. You can register here. Be sure to bring your own burning questions to the Q&A!

SMU Steel 101 Training

Whether you’re new to the steel industry or looking to deepen your knowledge, there’s no better way to understand how steel is made than to see it up close. Join us June 10–11 in Memphis, Tenn., “the Home of the Blues,” and enjoy an exclusive tour of Nucor Steel Arkansas – one of the most advanced mini-mills in the US. Get the details here.

Economic highlights

May 27: Durable goods, consumer confidence

May 28: Minutes of Fed’s May FOMC meeting

May 29: Initial jobless claims, GDP (first revision), pending home sales

May 30: Personal income, Chicago Business Barometer (PMI), consumer sentiment