US HDG prices regain premium over CRC

US hot dipped galvanized (HDG) coil pricing has eclipsed cold rolled coil (CRC) pricing for the first time since January.

The Argus US HDG ex-works assessment was $880/short ton (st) on 3 October, a $20/st premium to CRC, reflecting tightening supply reported in the market by steel sources.

Multiple planned maintenance outages at steelmakers have led to less HDG availability, sources have said, with lead times at 8.5 weeks, a seven-month high. CRC lead times are at 8.4 weeks, edging down week on week.

While both lead times are at nearly similar lengths, demand seems to have picked up for HDG products and some mills are reportedly communicating that supply may be limited for the rest of 2023.

HDG demand has not yet been widely curtailed despite the ongoing strike by the United Auto Workers (UAW) union against Ford, General Motors and Stellantis that has led to six assembly plants being shut down.

The US auto industry is one of the largest consumers of flat steel products, with galvanized sheet a major component of doors, hoods and other steel auto parts.

US steel mills are reportedly digesting large tonnage transactions made in the last week that pushed out hot rolled coil (HRC) lead times to 7.2 weeks this week from 5.5 weeks in the prior week. The HRC and HDG lead time spread is the narrowest since 1 August.

By Rye Druzin