Weak Demand Propels Galvanized Plain Sheet Prices to Decline in the USA

In the US market, Galvanized Plain Sheet prices fell sharply in early November due to falling demand dynamics. According to market participants, the Galvanized Plain Sheet valuation declined by USD 57/MT. However, buyers cited the prices of Galvanized Plain Sheet in the range of USD 988 to 1071/MT. In addition, the lead time for Galvanized Plain Sheets has been extended to 6 weeks.

Market participants were disappointed by Cleveland-Cliffs' announcement last week that the company will aim to increase quarterly upstream Steel production rates by 8-10% compared to the first three quarters of 2022, adding 2,73,060-3,64,080 MT of production. Both Cliffs and US Steel anticipate an increase in downstream automotive demand.

According to our sources, downstream demand has been mixed, with Whirlpool announcing a 35% reduction in production in the third quarter. At the same time, General Motors (GM) increased its US auto inventories during the same period. Ford's sales dropped sequentially as a result of partially completed vehicle inventory.

The majority of service centres have reported that downstream demand for Galvanized Plain sheets is down and becoming more pessimistic as the market approaches the Thanksgiving holiday in the United States later this month, as well as the typical seasonal slowdown that happens during it. The Galvanized Plain Sheet market awaited the outcome of contract negotiations between integrated steelmaker US Steel and the USW to replace the one that expired on September 1. Many believe that a potential strike is the only way to turn the Galvanized Plain market around and avoid increased production curtailment by steelmakers. As a result of the limited demand outlook and rising inflationary pressure, ChemAnalyst anticipates that Galvanized Plain Sheet prices will fall in the coming weeks.