'Unprecedented stability' in prices rules galvanized mart

Each month, SMU is invited to join a discussion of the galvanized sheet market with the Sheet Metal/Air Handling Council of Heating, Air-Conditioning & Refrigeration Distributors International (HARDI). Participants are wholesalers, service centers, distributors, and manufacturers who buy or sell galvanized sheet.

More of the same

“Unprecedented stability is the headline,” one participant quipped. He added that inventories are balanced, with customers aiming to buy at what could be the bottom of the marketplace.

He doesn’t see change coming anytime soon unless there’s a big alteration on the trade policy front (a possibility, given the election).

Looking at SMU’s interactive pricing tool over the last three months shows our average galvanized pricing in a relatively narrow band from $870 per short ton (st) on July 30 to a high of $945/st on Oct. 1.

SMU’s current galvanized coil price stands at the low end of that range, at an average of $870/st FOB mill, east of the Rockies, as of Oct. 29.

(Note that we adjusted our price momentum indicator for galv to neutral this week, meaning we see no clear direction for prices over the next 30 days.)

Viewed from another angle, the HARDI call moderator said that market prices for galv have only increased (by more than $0.50/cwt or $10/st) three out of 44 weeks this year.

“It has been a tough year for profit,” he added.

Fast forward to the current market, and another participant said there is plenty of steel to be had, with more supply from mills.

Bottom reached, outlook?

The recent price increases from U.S. Steel and Nucor “are big news,” the second participant added.  

Recall that Nucor said it is seeking $740/st for hot-rolled (HR) coil this week, up $20/st from the previous week. And last week, USS said it’s aiming for an increase of $30/st for sheet products in general. (The company did not announce a target price for HR.)

With the new year just around the corner, the second participant said he was “optimistic about 2025 on conversations on questions with economists and customers.”

However, sluggish demand for electric vehicles was a concern.

“Battery trends are a big driver of commercial construction, and if that’s on hold, that could be a problem – especially if it becomes a trend,” he said.

The first buyer was slightly less upbeat about the prospects for next year.

He expects a “slow melt-up next year as demand improves, so reverse of this year with its slow meltdown.”

Galvanized sheet prices

Each month on the HARDI Sheet Metal/Air Handling Council call, a survey is conducted to see where members see galvanized steel prices moving in one, six, and 12 months.

On September’s call, 58% thought prices would be flat month over month, while the remainder thought prices would rise. Turned out prices were a soft sideways, falling slightly.

The call moderator noted that galvanized prices have declined ~$1.00/cwt since last month’s call to ~$43.50/cwt ($870/st).

This month, a whopping 88% of members on the call predicted galvanized prices will be flat (+/- $2/cwt) a month from now. Only 6% think prices will be up more than $2/cwt in 30 days, while the remaining 6% predict they’ll increase by more than $4/cwt.

Regarding pricing six months out, opinion was much more diverse, with only 12% anticipating flat tags. Additionally, 53% think galv prices will rise more than $2/cwt over the next six months, 29% believe they will be up more than $6/cwt, and 6% expect prices to increase more than $10/cwt.

As for pricing a year from now, 63% think galv prices will be in the range of $50-59/cwt, 19% predict a range of $60-69/cwt, and, on the opposite side, 19% anticipate a range of $40-49/cwt.

SMU participates in a monthly steel conference call hosted by HARDI and dedicated to better understanding the galvanized steel market. The participants are HARDI member companies, wholesalers who supply products to the construction markets. Also on the call are service centers and manufacturing companies that either buy or sell galvanized sheet and coil products used in the HVAC industry and are suppliers to the HARDI member companies.