In recent months, US domestic hot dip
galvanized (HDG) coil prices have been on a decline as mill business has slowed due to diminishing demand.
Like hot rolled and cold rolled coil products, HDG products have seen demand fall off significantly in the last couple of months. The market has quickly shifted from a sellers’ market to a buyers’ market as prices are slipping and buyers are able to strike deals with mills.
The
automotive and residential
construction sectors have continued to weaken, creating less business for domestic mills. Domestic flat rolled mills are not able to fill their order books because customers are not buying regularly. With prices trending downwards, buyers are only asking for orders if they absolutely need it immediately; otherwise, buyers are waiting it out, hoping to get cheaper material in the weeks to come.
The official HDG base price from US domestic mills is priced at approximately $58.00 cwt. ($1,279 /mt or $1,160 /nt), depending on the mill; however, mills are not even mentioning a number that high to customers, and are instead quoting spot prices closer to $55.00 cwt. to $56.00 cwt. ($1,213 /mt to $1,235 /mt or $1,100 /nt to $1,120 /nt). Customers have said, though, that mills are prepared to take their spot price offer down a couple of notches if needed.
As a need for orders persists, mills are willing to make deals with customers who have the right inquiry. If a customer is willing to book a large amount of tonnage, mills have been said to go as low as $53.00 cwt. ($1,168 /mt or $1,060 /nt) on their HDG base price. Although mills are willing to slash their prices, this is actually creating less orders for the mills since customers realize within the next few weeks, they’ll be willing to come down even further.
Domestic spot prices for HDG 0.019" x 48" G90 are now ranging from $64.00 cwt. to $66.00 cwt. ($1,411 /mt to $1,455 /mt or $1,280 /nt to $1,320 /nt) ex-mill Midwest, though mills are willing to make deals for customers wanting major tonnage.
In other domestic news, the United Steelworkers (USW) are threatening a strike against the US-based plants of
ArcelorMittal. The two sides have until Saturday to come to an agreement on their contract; however, if a decision is not agreed upon and the workers strike, it could lead to a shortening of supply, which could potentially tighten up the market significantly and result in an increase in flat rolled spot pricing. Over 14,000
ArcelorMittal workers in the US are USW members. Analysts say, though, that the union probably will not strike, and that the two parties will likely agree Saturday to extend the current contract until the terms of the new contract can be agreed upon.
On the import side, prices have been on the decline as well, as offshore mills have been lowering their prices in an attempt to compete with the domestic prices. Although prices are sliding, traders are still finding it difficult to sell much of anything, since customers are expecting prices to slide some more in the near future. Also, domestic products are readily available with short delivery times and competitive prices. With imports not arriving until late fourth quarter, US buyers do not want to take the risk, as it is expected that domestic prices will have softened even further by then.
Offers from
China for HDG 0.019" x 48" G90 have decreased by $2.00 cwt. ($44 /mt or $40 /nt) in the last week. Chinese offers are ranging from $63.00 cwt. to $65.00 cwt. ($1,389 /mt to $1,433 /mt or $1,260 /nt to $1,300 /nt) FOB loaded truck West Coast ports.
Chinese offerings for HDG sized 0.028" x 48" G40 have also fallen by $2.00 cwt. since last week and now range from $58.00 cwt. to $60.00 cwt. ($1,279 /mt to $1,323 /mt or $1,160 /nt to $1,200 /nt) FOB loaded truck West Coast ports.
Offers from
India for 0.012" by 40.875" G30 have decreased significantly ($66 /mt or $60 /nt) since our last report. Offerings are now in the range of $63.00 cwt. to $65.00 cwt. ($1,389 /mt to $1,433 /mt or $1,260 /nt to $1,300 /nt) FOB loaded truck Gulf ports.
For the same size and coating, Chinese offerings are priced at $62.00 cwt. to $64.00 cwt. ($1,367 /mt to $1,411 /mt or $1,240 /nt to $1,280 /nt) FOB loaded truck West Coast ports.
On the galvalume side of the market, for 0.019" by 48" AZ55 items, domestics have decreased as well and are now ranging from $66.00 cwt. to $68.00 cwt. ($1,455 /mt to $1,499 /mt or $1,320 /nt to $1,360 /nt) FOB mill. As for imports, the offers that are available are not too competitive. Taiwanese offerings are at approximately $67.00 cwt. to $69.00 cwt. ($1,477 /mt to $1,521 /mt or $1,340 /nt to $1,380 /nt) FOB loaded truck West Coast ports, while Indian offers are priced at $68.00 cwt. to $70.00 cwt. ($1,499 /mt to $1,543 /mt or $1,360 /nt to $1,400 /nt) FOB loaded truck Gulf ports.