Prices
Zinc Price Down, Will Coating Extras Follow?
Written by Brett Linton
March 15, 2020
Zinc spot prices have been falling steadily over the past two months, dropping nearly a quarter since late-January. According to Kitco.com, the spot price was $0.8987 per pound as of Friday.
This drop in zinc prices may prompt a change in mill galvanized coating extras. In August/September 2019, many mills adjusted their coating extras when zinc was trading in the range of $1.00-$1.06 per pound.
SMU data suggests galvanized extras could decline around 15 percent given the current zinc spot levels. Our current 0.060″ G90 price extra (used for the SMU G90 galvanized price index) is $3.45/cwt, down from $3.90/cwt in mid-October 2019. This price extra could be revised downward to $3.00/cwt if mill adjustments are made.
Since the 2019 revision in mill galvanized coating extras, zinc prices had risen to around $1.17 per pound in early-November, declined to $1.00 in mid-December, and inched back up towards $1.12 in mid-January.
Current coating extras out of the domestic steel mills for .019 G90 range from a low of $8.85/cwt at California Steel/USS Posco to a high of $14.15/cwt at ArcelorMittal. A galvanized extra comparison by mill can be seen here on our website.
SMU is contacting the domestic steel mills to see if any of them are working toward changing their galvanized coating extras.
Brett Linton
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