Quiet deal-making still prevalent in US domestic HDG market

With US Steel officially decreasing the price of its coating extras last week on the heels of softening zinc prices--following a similar move from Nucor the week prior--other mills have been quietly cutting prices of coating extras as well. As such, even though US domestic hot dipped galvanized (HDG) base spot prices have increased $1.00 cwt. ($22/mt or $20/nt), HDG spot prices haven't moved much in the last week, and spot prices for other coated products have stayed largely neutral. But deals below current spot price ranges (see below chart) also continue to be widespread. Sources tell SteelOrbis that while most mills are filling up February order books, lead times are not that extended across the board, and mills still desperate to fill up for January are cutting prices as much as $1.00-$1.50 cwt. ($22-$33/mt or $20-$30/nt) to fill order books.

Although spot prices are still likely to increase in the short term--at least throughout January--as raw material prices are on the rise and demand is holding firm, there isn't much long-term confidence in the flat rolled market's current uptrend. While demand is steady, it is far from robust--existing demand levels still don't warrant current production rates, which increased nearly 6 percent last week-- so buyers will continue to be concerned that if production rises well into the New Year, lead times could quickly shrink again, and prices could once again tumble.