Prices for cold-rolled and galvanized steel sheet in the United States climbed for the sixth straight week after mills filled order books well into November, with some unable to promise shipment until December.
*** cold-rolled coil
Fastmarkets’ weekly price assessment for steel cold-rolled coil, fob mill US rose to $36 per hundredweight ($720 per short ton) on Thursday September 17, up by 2.9% from $35 per cwt on September 10. The price has gained 16.1% since mid-August, when the assessment stood at $31 per cwt.
For the third week in a row, Fastmarkets’ price assessment for steel hot-dipped galvanized (base) steel coil, fob mill US jumped by a greater amount than cold roll. On Thursday, the price again rose by $1.50 per cwt, leaping to $37.50 per cwt ($750 per ton) from $36 per cwt a week earlier. The HDG price has gained 21% over the six weeks of increases.
Lead times have stretched out to to between six and 10 weeks for cold roll and between eight and 11 weeks for galvanized material, according to market participants and mill shipment summaries.
*** The market is all about availability right now
“The market is all about availability right now,” with customers willing to pay higher prices to ensure that they have adequate stock, a trading source said.
“You shouldn’t buy unless you need it, or you get somewhat gouged. That’s short-term. At some point, the fundamentals return,” that source continued. “I suspect [prices] will go up a tad further, and then peak out at the end of the month, and you’ll see a gradual decline again.”
Four mill sources said their companies were quoting offers that reflect the full extent of the most recent price rises, with some success either collecting the increases in their entirety or winning purchase orders within $1-1.50 per cwt of the full increase amount.
A confluence of events sparked buying activity in September that some market participants have described as at almost a panic level: higher ferrous scrap prices, the strike at NLMK USA’s mill in Pennsylvania and operational bottlenecks at other mills. At the same time, automotive- and construction-related demand has been healthy, while manufacturing sectors are proving that they can continue to operate during the Covid-19 pandemic.
A storm-related power failure led to damage to a coating line at Big River Steel in Arkansas and has knocked out capacity for most of September. The company initially stated that the repairs would cause a two-week outage, but the shutdown has lasted longer.
*** galvanized steel
“Galvanized is tight and it’s going up,” a southern distributor said.
Some market participants said end-use demand was not measuring up to the torrid pace of restocking that is taking place. Therefore, the most recent mill price increases likely will not be sustainable.
“Everyone has run their inventories way down, and the mills are filled with orders due to the short supply,” an East Coast distributor said. “Once that inventory is on the ground, everyone will back off and see what increases have been accepted. We are still seeing a lack of incoming orders, and that concerns me. Less orders and higher prices probably don’t work.”
Fastmarkets has proposed various amendments to its domestic flat-steel price assessments, including launching two separate prices for steel hot-dipped galvanized (hot-rolled coil base) and steel hot-dipped galvanized (cold-rolled coil base). The deadline to provide feedback is Friday September 25.
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