Since last week, the US hot dipped galvanized (HDG) coil market has seen some January price increase announcements from domestic mills, while almost every import offer has been retracted as offshore mills wait to see how the US domestic pricing for January will shake out.
It is at this point too soon to say how much most US HDG offers will increase come January, but AK Steel and Nucor Sheet Mill have already announced they will raise coated product prices by a minimum of $30/nt ($33/mt or $1.50 cwt.) in January, and some HDG suppliers, including Sharon Coatings, have issued new coatings and size extras for January that are up to $30/nt higher than in December. And perhaps more significantly, in the week leading up to Thanksgiving just about all US flat rolled mills have closed their December books with just about all producers now looking towards January orders.
Still, while some new prices for January have been announced, no significant bookings are heard to be taking place at the new price levels yet, with some bookings at the December numbers taking place as recently as Monday. Next week, following the Thanksgiving holiday, it is expected that most US flat rolled mills will officially open their January books, and more January price hikes will be seen across the board. Depending on how far scrap prices rise in December and how mills' order books for January are shaping up, it is possible that producers could announce further price increases for January/February in the coming weeks. Still, it seems that the current up-tick is being driven primarily by low inventories and rising raw material costs rather than a strong improvement in demand, so it will remain to be seen whether the rising trend will be sustained through the first quarter.
For December shipment, most domestic base prices for HDG coils ranged last week from approximately $30.00 cwt. to $32.00 cwt. ($661/mt to $705/mt or $600/nt to $640/nt), while offers of 0.019" x 48" G90 (0.48 mm x 1.219 m) and 0.012" x 40.875" G30 (0.30 mm x 1.04 m) both generally ranged from $41.00 cwt. to $43.00 cwt. ($904/mt to $948/mt or $820/nt to $860/nt) ex-mill. However, with the recent base, size and coating price hikes, January offers should be up at least $1.50 cwt. from this level, and even further increases may be seen for light gauge items.
On the import side, as mentioned, the main offshore sources that had been offering HDG to the US, primarily China, India and Taiwan, have all retracted their offers this week following the domestic price hikes. These sources will likely re-enter the market at higher prices once domestic January spot price levels become apparent over the next couple weeks. As most import HDG offers were already unworkable in recent weeks as there was no significant price benefit compared to domestic offers, this should remain the case through at least the end of the year, with import offerings, for the most part, remaining viable only for niche and specialty items.