Steel Products Prices North America
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Bits ‘N Pieces: A Galvanized & SMU History Lesson
Written by John Packard
September 28, 2014
From the years 1997 through 2007 Steel Market Update’s founder and publisher, John Packard, was representing Winner Steel, a domestic conversion mill operating out of Sharon, Pennsylvania and now part of the NLMK USA group. He shares some of his old notes on galvanized pricing which ultimately lead to the beginnings of Steel Market Update as a publication:
Over the weekend I was cleaning out some of my old sales files. In the process I found some of the prime prices quoted in the past and found the information to be pretty interesting. Especially when taking a look at the current flat rolled steel pricing coming out of the domestic steel mills. Here are just a few examples:
In 1999 I was representing Winner Steel, a galvanized conversion steel mill located in Sharon, Pennsylvania and now part of the NLMK USA group. I quoted a large service center group in the Southeastern USA the following contract prices (all FOB Sharon, PA):
.010” X 36” X Coil G30 @ $30.50/cwt.
.015” X 48” X Coil G30 @ $26.50/cwt.
.017” X 48” X Coil G40 @ $25.50/cwt.
.026” X 35” X Coil G40 @ $23.00/cwt.
.034” X 34” X Coil G40 @ $20.00/cwt.
In my notes I had competitive pricing analysis done for another domestic steel mill (dated January 6, 1999) and the galvanized base price being used at that time was $19.50/cwt (plus the mills were equalizing freight).
The same customer was quoted some HVAC items in May 2001 (Delivered to Tampa, FL by rail), all 10,000# max coils:
.0187” X 48” X Coil G60 @ $22.20/cwt.
.0187” X 48” X Coil G90 @ $24.05/cwt.
.0236” X 48” X Coil G60 @ $20.20/cwt.
.0236” X 48” X Coil G90 @ $21.70/cwt.
I also found notes for a contract quote on both CS/B and DDS/IF material which was dated August 23, 2001 and the base price being used was $16.25/cwt!
By the time we reached January 2003 things were beginning to change. Here are some of the prices I quoted an HVAC wholesaler for March delivery (about 8 week lead times). Prices referenced include freight to the East Coast from Sharon, PA and the coils are 10,000# max:
.019” X 60” X Coil G90 @ $29.75/cwt.
.023” X 60” X Coil G90 @ $27.35/cwt.
.029” X 48” X Coil G60 @ $23.95/cwt.
Then I came across prices for another wholesaler dated June 2005. Prices shown include $1.90/cwt in freight charges and the base price being used was $30.00/cwt:
.0190” X 48” X Coil G90 @ $40.10/cwt.
.0236” X 48” X Coil G90 @ $37.75/cwt.
.0296” X 48” X Coil G90 @ $36.00/cwt.
I also found prices for the same items to the same customer, only dated March 30, 2005, and the base price was $32.00/cwt not $30.00/cwt as listed above.
I had a number of furnace pipe manufacturers who purchased steel from me on a regular basis. Prices were starting to get a little “testy” by late 2003. I came across a quote which called for firm prices for August through September 2003 but any steel falling into October would be increased by $10 per ton.
Prices shown below are for G30 galvanized with freight prepaid (about $1.50/cwt), 10,000# max coils and all decimals are nom (+/- tolerances) rolled to the light side and billed on actual weight:
.015” X 48” X Coil G30 @ $26.80/cwt.
.018” X 48” X Coil G30 @ $25.55/cwt.
The same items quoted for March 2004 delivery only and quoted in January 2004, four months after the quote above:
.015” X 48” X Coil G30 @ $31.30/cwt.
.018” X 48” X Coil G30 @ $30.05/cwt.
In four months the prices on each item had increased by $4.50/cwt and the mill was only quoting prices one month at a time.
Late in January (23rd) 2004 we quoted prices on the same items only now they were for April shipment only:
.015” X 48” X Coil G30 @ $35.30/cwt.
.018” X 48” X Coil G30 @ $34.30/cwt.
It was during this time that Steel Market Update was born as a way of helping my customers understand why prices jumped $90 per ton over a few months time and then jumped $80 to $85 per ton in less than 30 days!
It was at this point in time that I decided that my customers needed to better understand the circumstances behind the jump in pricing and what they needed to do to protect themselves. This was the time when I started writing Steel Market Update for my buying customers. Over time it was picked up by other sales people to assist in their sales process. I have produced the Steel Market Update on almost a daily basis ever since.
SMU Note: At what point in time did the domestic mills raise prices to never before seen levels (and not seen since)? I happened across my pricing file for 2008. The first price increase letter I came across was from ArcelorMittal dated March 10, 2008. Base prices were referenced as being: hot rolled = $40.00/cwt ($800 per ton), cold rolled = $45.00/cwt ($900 per ton) and galvanized = $46.00/cwt ($920 per ton).
By the end of May prices had jumped (based on USS letter dated May 28, 2008) to: HRC = $54.00/cwt ($1080 per ton), CRC = $59.00/cwt ($1180 per ton) and galvanized = $59.00/cwt ($1180 per ton).
USS sent a quote letter on July 12, 2008 to a service center customer taking their base prices to: HRC = $56.00/cwt ($1120 per ton), CRC = $61.00/cwt ($1220 per ton).
SMU hot rolled spot price average peaked in July 2008 at $1070 per ton ($53.50/cwt) just prior to the market crashing. Steel Market Update incorporated and began selling subscriptions for the very first time in August 2008.
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John Packard
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