Futures

Hot Rolled and Galvanized Price Spread Shrinks Further

Written by Laura Miller

June 30, 2023

As sheet prices continued to decline throughout June, the spread between hot-rolled coil (HRC) and galvanized coil base prices also shrank further.

Recall that at the end of May, the galvanized premium over hot-rolled coil (HRC) averaged $175 per ton.

As of this week, that premium had fallen to $150 per ton.

Let’s look at the numbers further.

Figure 1 below shows SMU’s HRC and galvanized base prices as of June 27.

The average HRC price was unchanged this week at $875 per ton. That’s down 11.6% from $990 per ton the last week of May and down 24.6% from the highest point so far this year of $1,160 per ton during the week of April 11.

For galvanized sheet, the average price registered $1,025 per ton this week, down 12% from the last week of May and down 24% from this year’s peak of $1,350 per ton mid-April.

06.29.23 HRC Galv Spread 1

Highlighted in Figure 2, the average galvanized price premium over hot rolled fell to $150 per ton this week. That’s down from $175 per ton the last week of May and $205 per ton the last week of April.

That $150-per-ton figure is the lowest the premium has been in 16 weeks. We have to go back to the week of March 7 to see a lower premium – $100 per ton – and that’s the lowest the premium has been in about two years.

06.30.23 HRC Galv Spread 2

Figure 3 shows the galvanized premium over hot rolled as a percentage of the HRC price.

The premium fell to 17% this week, down one percentage point from a month ago. The premium as a percentage has been fairly steady since March.

06.29.23 HRC Galv Spread 3

By Laura Miller, laura@steelmarketupdate.com

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. She has held a variety of positions within the steel industry since 2007, including reporting and editing for Steel Business Briefing/Platts, the Association for Iron and Steel Technology, and Kallanish Commodities, as well as marketing for what was then known as ThyssenKrupp Steel USA (now AM/NS Calvert). After a five-year hiatus working across other industries, she returned to steel in 2021 and has covered the flat rolled, tubular, and trade areas of the industry. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania. She can be reached at laura@steelmarketupdate.com or 724-759-7869.

Read more from Laura Miller

Latest in Futures

HR Futures: Midwest ferrous futures consolidate gains, market anxiously awaits next move

Four weeks have passed since the last article from Rock Trading Advisors on January 30. The paint has dried, and Midwest HRC futures have exploded higher in response to President Trump’s declaration of impending 25% tariffs on all imported steel products. The rolling 2nd month CME Midwest HRC future erupted through the top end of its downtrend, one that dates back to the peak of the winter 2022 rally. It also broke out of its narrow range seen dating back to June of last year.

HRC and scrap futures: Markets pop on hot steel and tariff headlines

It’s been an event-filled month in US ferrous derivatives markets since my last column for SMU. There’s been no shortage of writings and musing about the ongoing steel and aluminum tariffs proposed by the Trump administration. And steel and scrap futures markets have responded accordingly. CME HRC futures prices have risen, and the curve has firmed. The February 2025 HRC futures contract, now in the pricing period, has added $47 per short ton (st) since its contact lows on Jan. 20 to settle at $767/st today.