US cold-rolled coil, galvanized sheet prices up; HDG crisis may loom

Prices for cold-rolled coil and galvanized steel sheet in the United States have again jumped to all-time highs after producers told customers that they may not be able to sell any spot tons in the first half of the year.

Fastmarkets’ weekly price assessment for steel cold-rolled coil, fob mill US climbed to $70 per hundredweight ($1,400 per short ton) on Thursday February 25 from $69 per cwt ($1,380 per ton) on February 18. The price has now gained 125.81% from its more than four-year low of $31 per cwt in August 2020.

Fastmarkets’ price assessment for steel hot-dipped galvanized coil (cold-rolled base), fob mill US jumped to $71 per cwt ($1,420 per ton) on Thursday, from $69.50 per cwt ($1,390 per ton) a week earlier. The assessment now has risen for 29 consecutive weeks, soaring by 129.03% over that period.

Fastmarkets’ weekly price assessment for steel hot-dipped galvanized coil (hot-rolled base), fob mill US similarly increased to $71 per cwt from $69.50 per cwt previously.

Inputs were received in a range of $68-72 per cwt for cold roll and $70-75 per cwt for galvanized base.

Two mill sources confirmed the pricing strength and said availability was still tightening for the value-added coil. Order books seem to be completely filled up with contract and spot purchases at least until June. One of the mill sources noted that the outlook for the March ferrous scrap trade is “much more optimistic” - another rationale for ever-higher steel pricing.

“In late January and so far in February, they have been slammed so much with orders that they don’t anticipate any April or May spot at all for galvanized,” one midwestern service center source said.

Another midwestern distributor shopped around at four mills; none would sell him anything before summer.

“No one is quoting me at this time, Everyone keeps telling me that it will be the second half before anyone will spot-quote,” that distributor said. “I don’t see imports making much of a dent.”

The demand curve for CRC and HDG items may elongate if automotive customers compensate for their current semiconductor shortage by canceling summertime outages and instead keep their production lines humming.

If automakers do not take their typical summer shutdowns, that would further constrain domestic steel supply, according to some buyers. As many as four coil mills are planning outages in June or thereabouts.

“We hear some ridiculous galvanized offers, but nothing really available,” one sheet consumer said. “In regards to spot availability loosening up, we are not really expecting that until July, there are just too many outages stacked up heading into June for the direction to change.”

Perceiving a potentially crisis-level shortage of HDG, there are US steel businesses now on a quest for imported hot-rolled coil, with the intention of hiring someone to covert that to HDG, the first midwestern distributor said.

Recent HRC offers were available from Canada, Mexico, South Korea, Egypt and Turkey, and some of those exporters have lowered their prices while the US domestic price has been spiking, according to Fastmarkets data.

Patrick Fitzgerald in New York contributed to this report.

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