US HDG coil market continues to see softening domestic and import offers

Thursday, 23 October 2008 16:01:32 (GMT+3)   |  
       

Hot dip galvanized (HDG) coil prices in the US domestic market have fallen another $60 /nt since last week and more decreases of a similar magnitude are expected to follow. 

Across the board, HDG buyers are seeing an approximate $3.00 cwt. ($66 /mt or $60 /nt) decrease in coil prices since last week, and expectations are that prices will continue to fall further. Domestic spot prices for base sizes of HDG coil items are now ranging from $41.00 cwt. to $43.00 cwt. ($904 /mt to $948 /mt or $820 /nt to $860 /nt) from most mills in the Midwest region. For sizes 0.019" x 48" G90 (0.48 mm x 1.219 m), domestic mills are selling in the range of $50.00 cwt. to $52.00 cwt. ($1,102 /mt to $1,146 /mt or $1,000 /nt to $1,040 /nt) ex-mill Midwest. For 0.012" by 40.875" G30 (0.30 mm x 1.04 m) sized items, domestic mills are falling within the range of $51.00 cwt. to $53.00 cwt. ($1,124 /mt to $1,168 /mt or $1,020 /nt  to $1,060 /nt) ex-mill Midwest.

The prices above represent a mid-range; however, buyers still stress that "prices are all over the map." Depending on the different specs of an inquiry, a buyer can find prices lower or higher than these values. Realistically, prices are falling within a very wide range, for some sizes, as much as $200 /nt ($10.00 cwt. or $220 /mt), though most buyers that are purchasing normal-sized volumes are able to find prices within the range mentioned above. 

So far these lower numbers have not triggered more buying activity; however, although business is pretty weak, it's not dead, and there are buyers out there taking advantage of these lower numbers. Most buyers are finding themselves in friendly bidding wars with domestic mills, trying to negotiate even lower numbers, and some are successful. 

Demand for galvanized products, and all flat rolled products in general, continues to be weak and mills are having trouble getting much business, which is a prime reason for the constant price slashing. In addition to the price cuts, domestic flat rolled mills have been cutting back output as well, and more production cuts are expected in the weeks to follow. 

Although prices are strongly trending down on the domestic side, the market is close to the point where it has corrected itself from the rapid price increases of early 2008, which leads market players to believe that within the next couple of months, the market may see a slowdown in how fast flat rolled prices are falling, and possibly even see some stability going into the first quarter.

On the import side, other countries that are also experiencing weak demand and falling prices, are offering to the US at numbers lower than the domestic levels to try to get some bookings. Although there are some interested parties, many buyers are still anxious to buy offshore in the down-trending US market, especially with import orders not arriving until the first quarter of 2009. 

Offers from China for HDG 0.019" x 48" G90 (0.48 mm x 1.219 m) items have decreased by 2.00 cwt., since last week to a new level of $47.00 cwt. to $49.00 cwt. ($1,036 /mt to $1,080 /mt or $940 /nt to $980 /nt) duty-paid, FOB loaded truck West Coast ports.

For the same size and coating, Taiwanese offers have decreased by $3.00 cwt. in the last week, and are now ranging from $48.00 cwt. to $50.00 cwt. ($1,058 /mt to $1,102 /mt or $960 /nt to $1,000 /nt) duty-paid, FOB loaded truck West Coast ports.

Meanwhile, Chinese offerings for HDG sized 0.028" x 48" G40 (0.71 mm x 1.219 m) have decreased by about $2.00 cwt. to a range of $44.00 cwt. to $46.00 cwt. ($970 /mt to $1,014 /mt or $880 /nt to $920 /nt) duty-paid, FOB loaded truck West Coast ports.

New offers from India for 0.012" by 40.875" G30 (0.30 mm x 1.04 m) are about $6.00 cwt. lower than their last offering, and are now falling in the range of $47.00 cwt. to $49.00 cwt. ($1,036 /mt to $1,080 /mt or $940 /nt to $980 /nt) duty-paid FOB loaded truck Gulf ports.

For the same size and coating, Chinese offerings have fallen $6.00 cwt. and are now priced at $45.00 cwt. to $47.00 cwt. ($992 /mt to $1,036 /mt or $900 /nt to $940 /nt) duty-paid, FOB loaded truck West Coast ports.

Mexican offers for the same size and coating have decreased by $7.00 cwt. in an attempt to stay a few dollars lower than US domestic offers to drum up some business. Offers from Mexico at the border crossing are ranging from $47.00 cwt. to $49.00 cwt. ($1,036 /mt to $1,080 /mt or $940 /nt to $980 /nt).

On the galvalume side of the market, for 0.019" by 48" AZ55 (0.48 mm x 1.219 m) items, domestic offers dropped another $1.00 cwt. to a range of $54.00 cwt. to $56.00 cwt. ($1,191 /mt to $1,235 /mt or $1,080 /nt to $1,120 /nt) ex-mill. As for imports, Taiwan is still offering at a range of $54.00 cwt. to $56.00 cwt. ($1,191 /mt to $1,235 /mt or $1,080 /nt to $1,120 /nt) duty-paid, FOB loaded truck in US Gulf ports. Offers from China are approximately $2.00 cwt. lower than Taiwanese offerings. 


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