US HDG, CRC still scarce as wide spreads remain in place

US hot-dip galvanized and cold-rolled prices continued to rise June 18 as supply options remained limited for value-added sheet products.

The daily Platts TSI US HDG-HRC index rose $17.50 over the week to $1,897.50/st, while the daily Platts TSI US HDG-CRC index was up by $23.25 at $1,902.50/st within the same time frame. The daily Platts TSI US CRC index moved higher by $36.50 over the week to $1,916/st.

A Midwest service center source cited more limited supply options for tandem products, while HRC availability started improving slightly. He put the market at a minimum of $1,900/st for any CRC and HDG availability, but prices were even higher for any availability with a shorter lead time. An integrated mill was targeting $2,040/st for its August CRC and HDG availability, according to the service center source.

Another Midwest service center source confirmed transacting small tonnage orders of August production CRC and HDG at that level from the integrated mill. He also reported small orders of CRC and HDG from a Midwest converter at $1,920/st, but their lead times were late September.

Tight through year-end?

“I feel like HDG will be tight for rest of year, honestly,” a third service center source said. He needed to pay $1,990/st for 200 st of HDG with CRC-substrate from a Midwest converter with a September lead time. Extending HDG lead times, he was exploring his options in import markets and placed a 600 st HDG order at a base price of $1,920/st on a delivered basis for October production from a Mexican converter.

The third service center source also reported a small-sized CRC transaction at $1,920/st for late July production from a minimill in the South. On the imports side, he was able to book more than 500 st of CRC at $1,700/st Houston DDP from Korea with an August shipment time.

A Midwest buyer noted firmer HDG outlook with potentially higher automotive activity: “Auto demand should increase in the second half of the year as forecasts from auto customers are up.”

“The chip situation is improving but they are tied to more truck/SUV platforms, so their demand never decreased as much as others,” the buyer added.

Availability remains a challenge

An HVAC manufacturer noted persistent demand from customers and cited struggles in meeting that demand and covering steel needs in the spot market. He put the HDG market at a minimum of $1,900/st, but finding availability for needed products from domestic mills remained challenging.

The manufacturer decided to tap the import market and received an offer at $1,880/st East Coast DDP for 16GA G90 product from Turkey with early December arrival time. He was still trying to decide about that cargo.

CRC-HRC spread remained elevated, standing at $231/st June 18, according to S&P Global Platts pricing data.

With a firmer demand outlook for value-added sheet products, domestic mills have been targeting larger spreads. An integrated mill was reported to target a spread as high as $320/st between prices for its August HDG and CRC production and HRC availability.

The combined Platts TSI price index uses a volume-weighted-average calculation – according to TSI’s standard – to determine value on an ex-works Indiana basis.

— Ali Oktay