HARDI Members Wary of Tightening Supplies

Demand remains strong even as galvanized steel prices have topped $900 per ton, reported members of the Heating, Air Conditioning & Refrigeration Distributors International in a conference call this morning. But the HARDI members—wholesalers who serve the HVAC market—expressed concern about the tight availability of galvanized steel and fear of running low on supplies. “We are making sure to take care of our loyal customers first,” said one executive on the call.

The steel mills have been disciplined about bringing back new capacity, keeping supplies tight in pursuit of higher prices. The flat rolled mills are operating near full capacity and lead times have stretched to nearly nine weeks, the highest since Steel Market Update began collecting data in 2011, said SMU President and Publisher John Packard. “When you have nine week lead times and less than two months of inventory, you’ve got a problem. The service centers are unable to build back inventory. Combined with the late deliveries, that is creating a shortage mentality.”