Steel Mills
Steel Mills Adjusting Galvanized Coating Extras
Written by John Packard
August 26, 2014
A number of steel mills have joined Nucor and US Steel by adjusting their coating extras on galvanized steel. Wheeling Nisshin advised their customers on Monday of this week that they were going to the new U.S. Steel galvanized extras. Severstal also made adjustments to their mills extras but they did not come out with the same extras at both Dearborn and Columbus. ArcelorMittal USA and ArcelorMittal Dofasco out of Canada announced that they were changing both their galvanized and Galvalume coating extras. To date, they are the first mill making a move on Galvalume extras.
Severstal
On Friday, Severstal advised their commercial team, “After carefully monitoring the price and delivery of zinc over the last few months, we have increased our coating extras for Hot Dipped Galvanized and Galvannealed products.” The note went on to say that zinc prices have been trending higher for nearly two years.
The new extras for both Severstal Dearborn and Severstal Columbus, “…are to be used immediately for all new orders promised/acknowledged for September 29, 2014 or later.”
Steel Market Update reviewed both the Dearborn and Columbus extras and found that they are not the same. What Severstal has done is to match the U.S. Steel coating extras at their Dearborn facility and the Columbus extras will match those of Nucor.
The new extra for 24 gauge (.0236” min) G90 out of Dearborn is $8.15/cwt and out of Columbus the extra used will be $8.00/cwt.
ArcelorMittal Dofasco
ArcelorMittal Dofasco out of Hamilton, Ontario, Canada announced they will be changing extras on both hot dipped galvanized and Galvalume coated products. In a note to their customers dated August 25th the mill reported:
“ArcelorMittal Dofasco has been monitoring the cost of zinc and aluminum input costs as they reflect in our coating and pricing extras tables. Since the last revision of zinc extras, effective with January 2nd, 2012 shipments, there has been a +18% increase in zinc LME. Coupled with the significant depreciation of the Canadian dollar over this time period, ArcelorMittal Dofasco will be adjusting the book price for Galvanized, Galvanneal and Galvalume coating extras. The new coating extras will apply to new orders acknowledged to ship beginning week of October 6th, 2014 and new contracts as they are renewed.”
ArcelorMittal USA
“ArcelorMittal USA LLC is constantly reviewing key input costs and their impact on certain pricing extras. In view of the increase in LME zinc extras that have been sustained for the past several months, we will be adjusting the price of its coating extras effective with new orders acknowledged for shipment in the week beginning October 5, 2014,” is how the letter began announcing the change in their galvanized coating extras. Upon review, they appear to mirror the extras being charged by US Steel.
NLMK Pennsylvania
Late last week NLMK Pennsylvania (former Sharon Coatings) adjusted their coating extras and, based on a quick inspection, it appears the mill is using the same extras as those of U.S. Steel.
We have been advised by market sources that Steel Dynamics (SDI) will revise their extras either later today or on Wednesday when they open their October order book (this covers The Techs as well). We heard that CSN also made a move on their extras. We anticipate by the end of this week all of the domestic mills east of the Rockies will have adjusted to the new higher coating extras.
For end users and service centers who purchase galvanized steels the end result is a price increase. At the same time, the adjustment makes foreign coated steels that much more attractive to those located in geographical areas where it makes sense.
John Packard
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