Galvanized price premium over hot-rolled coil slips

Our galvanized price index averaged $920/st last week (base price with no extras). Prior to last week, galvanized prices had held steady at $905/st since mid-August. Back in late July we saw galvanized prices decline to a ten-month low of $870/st.

Figure 1 shows the pricing relationship between these two products.

As seen in Figure 2, the relationship between hot rolled and galvanized prices has been volatile since late 2021, much more so than prior to the pandemic.

As of last week, galvanized currently held a $230/st price premium over hot-rolled steel. This is the fourth-lowest spread measured in 2024 to date. Since the beginning of this year, the highest spread between these two products occurred in May at $320/st. That followed gradual increases across the five prior months. The lowest spread was $205/st in the last week of August. This time last year the spread was $215/st.

The spreads we have experienced over the past month are in line with levels seen in September-November of 2023. Prior to the post-pandemic volatility, we saw spreads mostly between $85-220/st for multiple years.

An alternative way to compare these two product prices is to look at the galvanized premium as a percentage rather than a dollar value. In Figure 3, we graph the hot-rolled/galvanized price spread as a percentage of the hot rolled price.

The percentage premium paints a slightly different picture to Figure 2. The latest premium is 33%. This rate has ticked up each of the last three weeks but remains one of the lower measures of 2024. The premium climbed to a nearly two-year high of 44% back in June. That followed an upward trend generally witnessed since March 2023, when the premium bottomed out at 9%. This time last year the premium was also 33%.

Prior to the pandemic volatility, galvanized prices held an average premium of 24% above hot rolled prices from 2017 through the end of 2021. The premium reached a record high of 52% in July 2022.