US spot offers of some hot-dipped galvanized (HDG) coil products have slipped further within the past week domestic mills continue to play "let's make a deal."
US flat rolled mills continue to discount their offers as the competition for December orders intensifies. Most mills have lead times into mid-December but are having a difficult time wrapping up the year completely since so many buyers are sitting on the fence, waiting for prices to drop further. The average customer has little incentive to buy right now and most will not return to the market in a major way until domestic lead times start to stretch out again.
Scrap prices have also retreated this month, which gives minimills even more room to discount. However, while the downward price trend persists, mills have yet to extend their December discounts for January deliveries, which indicates that they are still optimistic that they will be able to get better prices by the time they need to start booking January.
Furthermore, customer inventories remain pretty light, and this should give the market some legs once prices and lead times start to grow again.
Since last week, US HDG base spot prices from Midwest mills have remained at a range of approximately $31.00 cwt. to $33.00 cwt. ($683/mt to $728/mt or $620/nt to $660/nt), while offers of 0.019" x 48" G90 (0.48 mm x 1.219 m) still range from $42.00 cwt. to $44.00 cwt. ($926/mt to $970/mt or $840/nt to $880/nt) ex-mill.
However, offers of 0.012" x 40.875" G30 (0.30 mm x 1.04 m), a product for which there is more import competition, have weakened to a range of $40.00 cwt. to $42.00 cwt. ($882/mt to $926/mt or $800/nt to $840/nt) ex-mill, which would indicate a base price of less than $30.00 cwt. ($661/mt or $600/nt). HDG base prices are not this low for all products, but domestic mills have become increasingly competitive on offers of 0.012" G30 in recent weeks, effectively matching the most competitive offshore offers of this product.
Meanwhile, mport HDG offers, have, on the whole, remained stable since last week. Unlike the domestic market, import flat rolled offers seem to have bottomed, particularly Asian offers, with both China and India floating slightly increased offers in recent weeks. Mexico is still somewhat aggressive, though they are not pushing a lot of tons. Overall, import HDG bookings are still very light, and generally only niche items are attracting any attention. Still, with import lead times now extending deep into the first quarter and US mills not yet offering any 2010 production, import offers may start to look increasingly appealing to some buyers in the next couple weeks as there is still a general expectation in the market that business and pricing will start to improve again by early next spring. But for now, most buyers would rather continue to wait out the market rather than commit to current offers.
For 0.019" x 48" G90 (0.48 mm x 1.219 m), most Chinese offers range from $40.00 cwt. to $41.00 cwt. ($882/mt to $904/mt or $800/nt to $820/nt); Taiwanese offers are at $41.00 cwt. to $42.50 cwt. ($904/mt to $937/mt or $820/nt to $850/nt); Indian offers are at $41.50 cwt. to $42.50 cwt. ($915/mt to $937/mt or $830/nt to $850/nt); and Korean offers range from $44.00 cwt. to $45.00 cwt. ($970/mt to $992/mt or $880/nt to $900/nt). All offers are duty-paid, FOB loaded truck in US Gulf ports.
For the lighter gauge HDG item, 0.012" x 40.875" G30 (0.30 mm x 1.04 m), Chinese offers range from $39.00 cwt. to $40.00 cwt. ($860/mt to $882/mt or $780/nt to $800/nt); Mexican offers range from $40.00 cwt. to $42.00 cwt. ($882/mt to $926/mt or $800/nt to $840/nt), though in some cases offers can be pushed slightly below this level; Indian offers range from $40.50 cwt. to $41.50 cwt. ($893/mt to $915/mt or $810/nt to $830/nt); Taiwanese offers range from $43.00 cwt. to $44.00 cwt.; and Korean offers range from $47.00 cwt. to $48.00 cwt. ($1,036/mt to $1,058/mt or $940/nt to $960/nt). All offers are duty-paid, FOB loaded truck except for the Mexican offers, which are delivered to the border crossing.