US HDG import market nears bottom as Chinese offers stabilize

Tuesday, 03 November 2009 00:02:54 (GMT+3)   |  
       

US hot dipped galvanized (HDG) coil prices continue to drift lower, while the import HDG market appears to be close to bottoming.

US domestic HDG offers have generally trended slightly lower in the last week, as mills are cutting deals at discounted numbers. However, the deals usually have some conditions attached, and offers are still not concluded outside of last week's price ranges on normal transactions. Most domestic base prices continue to range from $32.00 cwt. to $34.00 cwt. ($705/mt to $750/mt or $640/nt to $680/nt), while US offers of 0.019" x 48" G90 (0.48 mm x 1.219 m) coils still range from $43.00 cwt. to $45.00 cwt.  ($948/mt to $992/mt or $860/nt to $900/nt) ex-Midwest mills. Domestic offers for 0.012" x 40.875" G30 (0.30 mm x 1.04 m) continue to range from approximately $46.00 cwt. to $48.00 cwt. ($1,014/mt to $1,058/mt or $920/nt to $960/nt) ex-mill, Midwest.

Going forward, domestic HDG prices, along with those of other flat rolled products, are expected to continue drifting lower over the next thirty days or so or until all the mills have post-holiday lead times. Fourth quarter capacity cuts (including US Steel's two blast furnace outages planned for November/December) and lack of import presence will help keep inventories lean through year-end, though with demand generally remaining slow, prices are not expected to bounce back until mid-to-late first quarter 2010.

On the import side, Asian offers may be close to hitting the bottom, especially if Chinese mills continue to hold the line.

The main source offering HDG coils to the US remains Asia, with China still generally representing the lowest-priced offers. However, after undergoing a minor rebound in their domestic market, Chinese mills have held firm on pricing over the last couple weeks and, according to traders, have even rescinded an offer or two this past week. It is uncertain whether China's recent domestic HDG up-tick will be sustained, or whether mills will hold their resolve as regards export pricing, but for now they are not aggressively pushing for new business.

Taiwan and India have both reduced some of their HDG offer prices to the US over the past week or so, but it seems that this move was intended to bring offers closer in line with the Chinese levels. Taiwanese mills, despite lowering HDG offers to the US across the board by $2.00 to $3.00 cwt. ($44/mt to $66/mt or $40/nt to $60/nt), remain very selective in the items/orders they will accept.  Meanwhile, India has come down by $2.00 cwt. on light gauge galvanized items, though this decrease has not spread across all galvanized products, primarily due to increasing zinc prices. Indian mills are reportedly uninterested in doing any heavy gauge, heavy coating item business currently.

Since last week, Chinese offers of 0.019" G90 have remained at a range of $39.00 cwt. to $40.00 cwt. ($860/mt to $882/mt or $780/nt to $800/nt) duty-paid, FOB loaded truck in US Gulf ports, while Chinese offers of 0.012" G30 are also stable from last week and range from approximately $40.00 cwt. to $41.00 cwt. ($882/mt to $904/mt or $800/nt to $820/nt) FOB loaded truck in US Gulf ports. December production offers from China are flat from November, which is a positive sign that Chinese HDG offers to the US will hold firm in the near-term. Korean offers are also unchanged since last week, with 0.019" G90 offers still ranging from $44.00 cwt. to $45.00 cwt. ($970/mt to $992/mt or $880/nt to $900/nt)  duty-paid, FOB loaded truck in US Gulf ports, and 0.012" G30 still ranging from $47.00 cwt. to $48.00 cwt. ($1,036/mt to $1,058/mt or $940/nt to $960/nt) duty-paid, FOB loaded truck in US Gulf ports.

Indian HDG offers for the US for thicker coils and heavier coating also remained stable within the last week, while light gauge items have dropped by about $2.00 cwt. Indian offers of 0.019" G90 continue to range from $41.50 cwt. to $42.50 cwt. ($915/mt to $937/mt or $830/nt to $850/nt) duty-paid, FOB loaded truck in US Gulf ports, while most 0.012" G30 offers from India now range from $40.50 cwt. to $41.50 cwt. ($893/mt to $915/mt or $810/nt to $830/nt) duty-paid, FOB loaded truck in US Gulf ports.

Taiwanese offers to the US of the heavier gauge 0.019" G90 product dropped by about $2.00 cwt. over the last week or so, with most offers now ranging from $41.00 cwt. to $42.50 cwt. ($904/mt to $937/mt or $820/nt to $850/nt) duty-paid, FOB loaded truck in US Gulf ports, while Taiwanese offers of 0.012" G30 fell by approximately $3.00 cwt., with most offers now ranging from $43.00 cwt. to $44.00 cwt. ($948/mt to $970/nt or $860/nt to $880/nt).

Mexican offers of light gauge HDG have also surfaced since last week, with most offers of 0.012" G30 ranging from approximately $40.00 cwt to $42.00 cwt. ($882/mt to $926/mt or $800/nt to $840/nt) delivered to the border crossing.


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