Spot prices in US domestic HDG market significantly up

Monday, 06 December 2010 02:55:59 (GMT+3)   |  
       

Spot prices in the domestic hot-dipped galvanized (HDG) market have trended upward since our last report a week ago as the flats market received a double-dose of price increases in the week ending December 3.

Most major flats mills announced price increases just after the Thanksgiving holiday, indicating that minimum base prices on all flat-rolled products were increasing $2.00-$2.50 cwt. ($44-$55/mt or $40-$50/nt) effective immediately. And by the end of the day December 2, Nucor had already started to inform buyers that another $2.00 cwt. increase was imminent, and other steel mills are sure to follow suit, bringing the total of announced increases to approximately $4.00 cwt.($88/mt or $80/nt) within the span of one week.

The most commonly reported transactions prices for HDG and Galvalume base products are now $35.00-$37.00 cwt. ($772-$816/mt or $700-$740/nt) ex-Midwest mill, $3.00 cwt. ($33/mt or $30/nt) higher than last week's reported ranges. Current lead times are at about six-to-eight weeks, although those numbers are moving outward, and one East Coast trader notes that you'll have to be a "special buyer with a special order" to have product delivered by mid-to-late January.

Prices on HDG and Galvalume extras have also experienced some upward momentum, and transaction ranges are up approximately $2.00 cwt. over last week, with most orders being booked at the higher end of the range.

The upward trend is precarious however, as market players caution that despite increasing raw materials costs, which are up an additional $35-$45/lt this month, demand levels still aren't strong enough to warrant an $80/nt increase in mill prices in just a matter of days. One Southeast service center indicates that some distributors who have already made the necessary purchases to get them through the first couple months of the new year may be sitting on the sidelines through the end of February.

Still, it appears as though tendencies in pricing are expected to point upward for some time. Lower inventory levels when the first round of increases began early last month, coupled with an abundance of orders in recent weeks is pushing lead times increasing outward, thus meriting higher asking prices from mills.

 Cwt.Metric Ton (mt)Net ton (nt)Change from last week
US domestic HDG base price$35-$37$772-$816$700-$740↑ $3.00 cwt.
     
0.012"x40.875" G30    
ex-Midwest mill$45-$47$992-$1,036$900-$940↑$2.00 cwt.
     
0.019"x48" G90    
ex-Midwest mill$45-$47$992-$1,036$900-$940↑$2.00 cwt.
     
Galvalume    
ex-Midwest mill$35-$37$772-$816$700-$740↑$3.00 cwt.
     
0.019x41.5625 Gr80/AZ55    
ex-Midwest mill$45-$47$992-$1,036$900-$940↑$2.00 cwt

On the import side, Mexico, which had been so overwhelmed with orders in the past few months, is not actively offering coated products to US buyers. One trader in the South informed SteelOrbis that a few mills south of the border may be experiencing some problems in production, and are currently focusing on shipping out existing orders on time, rather than competitively making any new offers. Additionally, Taiwan and India, which have not been especially active in its offerings to the US market, have each increased their sales prices since last week.

Import HDG offers to the USCwt.Metric ton (mt)Net ton (nt)Change from last week
     
0.012"x40.875" G30    
India$47-$48$1,036-$1,058$940-$960↑$1.00 cwt.
     
Galvalume    
0.019x41.5625 Gr80/AZ55    
Taiwan$47-$49$1,036-$1,080$940-$980↑$3.00 cwt.


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