On 1 July, CRU launched a US Galvalume coil benchmark price to serve this growing market. While hot-dipped Galvalume coil prices trend with hot-dipped galvanised (HDG) coil prices, spreads can emerge due to different dynamics with US producers, imports, inventories and demand.
Galvalume is a licensed product by BIEC International Inc. that is sheet steel-coated with 55% aluminium, 43.4% zinc and 1.6% silicon. This gives Galvalume superior corrosion resistance relative to HDG coil – with a higher all-in cost. Galvalume’s durability makes it well suited for metal roofing and buildings, which are the main end-uses for the product. HDG coil is used in the construction sector too, but it also has more end-users in the HVAC, automotive and appliance markets.
Market participants have been seeking a data-driven index to follow the US Galvalume market, and while some buyers use CRU’s HDG coil price for physical contract settlement, this new Galvalume weekly price index offers another option.
Emerging price trends for Galvalume coil vs. HDG coil
Sheet steel prices have spiked this year, as imports have fallen because of uncertainty surrounding US President Trump’s tariffs. This has further tightened supply at a time when domestic suppliers have had limited availability.
Galvalume base prices generally trend with HDG coil base prices, but they are often higher because there are fewer producers in the US. However, this year has been different. With data starting in May, we can see that Galvalume coil prices have been lower and rose at a slower pace relative to HDG coil. In May, the CRU US Galvalume benchmark price held just below $1,200 /s.ton, while HDG coil prices continued to climb w/w.
There are several factors that help explain the slower rise in Galvalume prices. Galvalume serves the construction market, and while demand for metal roofing and buildings has been steady, surprisingly strong automotive demand this year has given HDG coil prices even more of a boost.
Anecdotal evidence also suggests there are sufficient inventories of Galvalume and extremely limited availability of spot material, which has limited the number of spot transactions. There are also buyers who only purchase monthly, and some have monthly prices with domestic mills. So, as HDG coil prices rose gradually w/w, those with monthly Galvalume prices showed steady prices until orderbooks opened for the next month.
Last month, an unplanned outage at one domestic producer caused the Galvalume market to tighten even further. On 17 June, the CRU HDG coil assessment was $20 /s.ton higher than Galvalume – the lowest spread captured so far. Market participants have said Galvalume prices should catch up to HDG coil prices, but this might happen gradually due to the lagging nature of the market.
If you want more information about CRU’s US Galvalume benchmark learn more about our Steel Sheet Service or directly request a demo here.
