Following
Nucor's sheet price hikes announced last week, US domestic hot-dipped
galvanized (HDG) spot prices for October shipment have risen by a minimum of $2.00 cwt. ($44/mt or $40/nt) from September prices.
HDG base prices from US producers have risen to approximately $33.00 cwt. ($728/mt or $660/nt) for October, from $31.00 cwt. ($683/mt or $620/nt) in September, reflecting
Nucor's and other producers' $40/nt increase on HDG. However, due to new extras, spot prices for
coated products, particularly light gauge items, are rising by at least $60/nt ($66/mt or $3.00 cwt.) for October.
Domestic offers for the HDG product 0.019” x 48” G90 (0.48 mm x 1.219 m) and the Galvalume product 0.019" x 41.5625" AZ55 (0.482 mm x 1.056 m) have risen from $40.00 cwt. ($882 /mt or $800 /nt) in September to $43.00 cwt. ($948 /mt or $860 /nt) in October, while mills are now offering the lighter gauge HDG product 0.012” x 40.875” G30 (0.30 mm x 1.04 m) at $45.00 cwt. ($992 /mt or $900 /nt), compared to $42.00 cwt. in September. All prices are ex-mill, Midwest.
Coated products remain the strongest segment of the US flat rolled market, led by the recent strength in
automotive, which is due largely to the success of the so-called “cash for clunkers” program. US automobile producers are encouraged by their strong sales as of late and are increasing
production accordingly, thus lending strength to demand for flat rolled products, particularly HDG and Galvalume. However, many think it would be premature say whether the
automotive market is in the midst of a full recovery, or if it is just experiencing a short-lived up-tick from the clunker program. One flat rolled trader said that people in the industry are “just terrified” that with after all of the new cars on order resulting from the clunkers program are produced, the
automotive market may fizzle out again in the fourth quarter.
Import competition is still a non-issue for the US flat rolled market, and the only sources offering mainstream
coated products,
China and
India, are far too high-priced to be viable. Traders say that the only reason why these sources are even still offering to the US market is to keep “one foot in the door.” The Asian flat rolled market is generally still seeing strong local demand and pricing, so mills in this region are therefore not interested in selling to the US market currently. But, as with the
automotive market, the import situation, too, may not necessarily stay tight through the end of the year. There is some speculation that Chinese flat rolled prices may start to trend down in the fourth quarter and result in the return of competitive offers to the US.
For now and for the foreseeable future (the next 60 days or so), the US HDG market is poised to remain strong due to the improving demand from the US automakers and lack of imports. However, it is too soon to tell whether the market will be able to maintain its momentum into the November/December holiday period.
The latest HDG offers from
India for 0.019” x 48” G90 (0.48 mm x 1.219 m) calculate to approximately $42.50 cwt. to $45.00 cwt. ($937 /mt to $992 /mt or $850 /nt to $900 /nt) duty-paid, FOB loaded truck in US Gulf ports, while offers for 0.012” x 40.875” G30 (0.30 mm x 1.04 m) range from $43.50 cwt. to $46.00 cwt. ($959 /mt to $1,014 /mt or $870 /nt to $920 /nt) duty-paid, FOB loaded truck in US Gulf ports.
Chinese offers for 0.012” G90 calculate to a minimum of $43.00 cwt. duty-paid, FOB loaded truck in US Gulf ports.