US hot-dip galvanized (HDG) coil prices have not moved in the last week; however, with spot prices for US HRC trending up and some HDG import offers starting to increase as well, it seems that the market has finally bottomed out.
The US flat rolled market is not yet strong enough for mills to announce an official price increase, but flat rolled spot prices are now trending up, with domestic HRC and CRC spot numbers inching slightly higher in the last week. Domestic HDG spot prices have not moved noticeably in the last week, but the pricing trend is now up. Producers, though still operating at drastically reduced capacities, are starting to get some steady business as buyers try to lock in low prices through mid-year.
While only small amounts of tonnage are being booked, mills hope that the reduced production and ongoing draw-down of inventories will eventually create a shortage, and they will be able to raise prices again. For now, though, cash flow remains a concern, and mills will not ramp up production again until they see a major increase in demand.
Current domestic HDG coil base prices on the spot market continue to range from approximately $30.00 cwt. to $32.00 cwt. ($661 /mt to $705 /mt or $600 /nt to $640 /nt) from most mills in the Midwest region. For sizes 0.019" x 48" G90 (0.48 mm x 1.219 m), domestic mills offer in the range of $39.00 cwt. to $41.00 cwt. ($860 /mt to $904 /mt or $780 /nt to $820 /nt) ex-mill Midwest, while domestic 0.012" by 40.875" G30 (0.30 mm x 1.04 m) is offered within the range of $43.00 cwt. to $45.00 cwt. ($948 /mt to $992 /mt or $860 /nt to $900 /nt) ex-mill Midwest.
On the import side, flat rolled offers are lagging slightly behind the domestic trend, as many foreign mills are still hungry for business. Import Chinese offers for most flat rolled products are beginning to firm up, as are most import offers for 0.019" x 48" G90, though import offers from most foreign mills for the more commonly imported size and coating, 0.012" x 40.875" G30, are still aggressive. The overall import trend for HDG is mixed, as Chinese offers are expected to continue trending up, while offers from other import sources such as India and Mexico may hover for a while at the current levels before eventually firming.
Offers from China and India for HDG 0.019" x 48" G90 (0.48 mm x 1.219 m) items have actually increased by $3.00 cwt. ($66 /mt or $60 /nt) in the last week, with most offers now ranging from $38.00 cwt. to $40.00 cwt. ($838 /mt to $882 /mt or $760 /nt to $800 /nt). China's offers are duty-paid, FOB loaded truck West Coast ports, while India's offers are duty-paid FOB loaded truck in Gulf Coast ports. For the same size and coating, Taiwanese offers also increased by $3.00 cwt. since the previous week, with most offers now ranging from $40.00 cwt. to $42.00 cwt. ($882 /mt to $926 /mt or $800 /nt to $840 /nt), duty-paid, FOB loaded truck West Coast ports.
Meanwhile, import offers from China and India for 0.012" by 40.875" G30 (0.30 mm x 1.04 m) have dropped by about $2.00 cwt. ($44 /mt or $40 /nt) in the last week, with most offers now ranging from $37.00 cwt. to $39.00 cwt. ($816 /mt to $860 /mt or $740 /nt to $780 /nt) duty-paid, FOB loaded truck in Gulf and West Coast ports. Mexican offers for the same size and coating have also decreased by $2.00 cwt. since last week, and now range from $38.00 cwt. to $40.00 cwt. at the border crossing
Generally, there are not many takers for HDG import offers right now, as no one wants to make the commitment to orders that will not arrive until several months in the future, since there is still a good deal of uncertainty in the market because of the weak demand and continuing bad news on the economic front. The weak US dollar is another factor working against imports.
Preliminary Census Data from the Steel Import Monitoring and Analysis (SIMA) information from the US Department of Commerce show that HDG sheet and strip imports registered a decrease in November 2008 from the previous month, though import levels were flat from November 2007 totals. HDG sheet and strip imports to the US in November 2008 totaled 108,790 mt, compared to 157,402 mt in October 2008, and 101,445 mt in November 2007. The most HDG imports in November 2008 came from: Canada, at 27,446 mt; followed by China, at 20,406 mt; India, 12,446 mt; Taiwan, 11,346; and South Korea, 9,539 mt.