Temporary stability in the cards for US domestic HDG market

While US domestic flat rolled spot prices rarely hold steady for long, domestic hot dipped galvanized (HDG) spot prices have remained neutral again in the last week and could remain at current levels for a couple more weeks, according to sources. Upward momentum in the domestic flats market stalled about a week ago as buyers slowed purchases and lead times started to contract slightly, following strong buying activity in the past couple months. Additionally, with the expectation that domestic busheling scrap prices could fall approximately $20-$30/lt next month, mills may not have enough leverage to keep pushing prices higher.

However, certain sectors are experiencing increasing demand levels, particularly from automotive and small increases in construction activity as well. So while there is no rush to place orders with availability still abundant, decent demand levels will prevent activity from slowing entirely, keeping spot prices steady for at least another week or two. Nevertheless, without support from higher scrap prices in March--as some are already predicting--another bump in demand, or curtailed domestic production levels, prices could face oncoming downward pressure.