Final Thoughts

Galvanized steel buyers need to remain aware of the movement in zinc pricing. With the strike at the zinc-processing facility in Canada there is a possibility that zinc supplies could tighten here in the United States. Zinc prices have been trading on the LME in the $1.30-$1.35 per pound over the past week. At the beginning of January zinc was trading for $1.22 per pound. if the higher zinc prices continue (remember, the steel mills pay an additional $0.065-$0.08 per pound premium for the metal) then galvanized steel buyers should expect new higher coating extras for 2nd Quarter 2017.

I was actually surprised the only mills announcing price increases so far this week were Nucor, NLMK USA, USS/POSCO and CSN. But, when you actually investigate where mills are in their negotiations with customers, some had not slipped as much as others and the need to announce prices they are already collecting shouldn’t be necessary. The majority of steel buyers were putting the target base prices as being $31.00/cwt-$32.00/cwt on hot rolled and $42.00/cwt-$43.00/cwt on cold rolled and coated. Most of the service centers I spoke with today think the mills will be able to get back on track – especially if scrap goes up as many have been reporting over the past week or two.