US cold-rolled coil, galvanized sheet prices surge; demand up, supply thin

Prices for cold-rolled and galvanized steel sheet have jumped again in the United States, and buyers who need spot material anticipate no near-term relief from domestic mills, where lead times ultimately may be stretching out to the spring of 2021.

Fastmarkets’ weekly price assessment for steel cold-rolled coil, fob mill US jumped to $53.50 per hundredweight ($1,070 per short ton) on Thursday December 17 from $52 per cwt ($1,040 per ton) on December 10. The assessment has now gained 72.58% since skidding to a year-to-date low of $31 per cwt in mid-August.

Fastmarkets’ assessment for steel hot-dipped galvanized coil (cold-rolled base), fob mill US climbed for the 19th straight week – to $54 per cwt ($1,080 per ton) on Thursday from $52.50 per cwt ($1,050 per ton) a week earlier. The price has soared by 74.19% during its four-month win streak.

Fastmarkets’ price assessment for steel hot-dipped galvanized coil (hot-rolled base), fob mill US also rose to $54 per cwt from $52.50 per cwt previously. That price has risen by 44% since its debut in October.

Multiple service centers reported that they can find no confirmed spot availability whatsoever at US mills for cold-roll and HDG, with the lack of material stretching not just to January and February but even beyond. Even on existing orders, for some customers, deliveries in November and December reportedly have totaled as little as 50% of the volumes ordered for the month. 

Based on conversations with the mills during the week of to Friday December 18, one sheet consumer in the Midwest was unsure that his operation will be sufficiently supplied in the first quarter. 

“They are not making any promises. I’ve heard March at the earliest” for spot shipments, the midwestern consumer said. “It puts us on the defensive… In my whole career, I have never been as close to the vest as I am now on material.”

Manufacturers in the automotive, yellow goods and home appliance sectors are still shopping around for the CRC and HDG they need to fulfill their own orders in the first quarter, according to service centers, fabricators and other processors who themselves have been forced to turn down business for lack of steel.

Two mill sources acknowledged their tardiness and customers’ frustration, but insisted that their volumes for certain items are almost entirely spoken for by contract customers. The mills must wait to be sure that they can truly deliver on a spot order before they commit to it – and certainly before they can formally open order books for February or March.

But an East Coast distributor suggested that the reportedly voracious appetite from end users may have been exaggerated, arguing that it is too risky to purchase inventory material at current prices.

“We have not seen any pick-up in our orders. Everyone I speak with says they are still off from pre-Covid tons. So where is the need?” the East Coast distributor said. “The only conversations being had are that of shortages and allocations, creating panic.”

While Covid-19 outbreaks have slowed production rates at particular steel mills, some buyers said a widespread return to pandemic-lockdown status throughout the country could hit demand more severely than it constrains supply. Under that scenario, if service centers already have replenished enough stock and availability suddenly outstrips consumption, mill sales teams may revert to dealmaking mode again.

“If there is a shutdown, the mills will come knocking on our door,” the midwestern consumer said. “The way they’ve been treating us the last couple months, it’s not going to be a good response.”