US domestic HDG prices rise as mills attempt second round of increases

Just as US domestic hot dipped galvanized (HDG) spot prices began reflecting price increases from two weeks ago, domestic flats mills are attempting another round of price hikes.

US domestic HDG base spot prices have jumped $2.00 cwt. ($44/mt or $40/nt) in the last week with spot prices for base products with coating extras rising by the same amount--reflecting a portion of the $3.00 cwt. ($66/mt or $60/nt) price increase announced by flats mills on August 10 and 11. HDG base spot prices are now in the range of $39.00-$41.00 cwt. ($860-$904/mt or $780-$820/nt) ex-Midwest mill. Domestic Galvalume coil base spot prices have increased in the last week as well, and are now $39.00-$41.00 cwt. ($860-$904/mt or $780-$820/nt) ex-Midwest mill--reflecting a $1.00 cwt. ($22/mt or $20/nt) increase from last week.

The main source of the dramatic rise in HDG spot prices in the last week has been order  books moving into October for nearly all domestic mills (albeit only early October), extending lead times to about five weeks, compared to just three-to-four week lead times a week ago.  Additionally, buyers began to place orders before a second round of price hikes was announced; over the last week, predictions surfaced that domestic mills would raise prices again in order to help push through the first increase and "light a fire under the hesitant buyer" to place orders, according to one East Coast distributor.

And on Friday, that prediction came to fruition when the NLMK USA mills and Sharon Coating issued a $2.00 cwt. immediate price increase on all new orders through an internal company memo--other steel mills are expected to follow the move, and HDG and Galvalume spot prices are likely to continue to firm over the next week.

While the US domestic HDG market has seen increased activity and higher prices in the last week, imports have only experienced the latter.  A week ago Taiwanese HDG and Galvalume prices for the US rose by about $1.00-$2.00 cwt., and this past week Chinese mills began raising their offer prices for the US. Chinese HDG 0.019" x 48" G90 are up $1.00 cwt. to $49.50-$50.50 cwt. ($1,091-$1,113/mt or $990-$1,010/nt) DDP loaded truck in US Gulf ports. Indian mills are also expected to raise their HDG offer prices for the US in the next couple weeks as a reaction to higher US domestic spot prices. But even though import prices are rising in line with US domestic HDG spot prices, US buyers' long-term confidence in the US domestic market is still rather bleak, and most consider import prices to be too close to US domestic spot prices to take any interest.

**DDP loaded truck delivered into Houston