Although the US galvanized coil market remains pretty stagnant, offshore mills have reportedly been less willing to lower their offers for the US in the last week, which may indicate that the bottom of the market is near.
Traders say that hot dip galvanized (HDG) import sources, particularly from Asia, are getting more bullish about the market and while demand isn't strong enough to raise their offers, they are trying to keep prices steady. In fact, for the first time in several weeks, on the whole, import HDG offers for the US have not declined at all over the last seven days.
At the same time, there are still very few orders being booked from import sources, as the long lead times for offshore material are resulting in most buyers purchasing solely from domestic mills on an as-needed basis. The vessel shortage in India is also restricting HDG imports from the region, and the talk of an impending dumping case filed against China and possibly other sources is also deterring potential import purchases. Traders note, however, that the market may soon bottom out and some of the competitive import offers might get pulled, especially if US mills proceed with the antidumping case.
For now, due to the overall weak demand, domestic mills are still far from full and are able to offer fast deliveries. However, if the import market tightens significantly and domestic mills start getting more orders, mills will likely put an end to their aggressive price cuts and special discounts. Domestic mills are currently booking for May and are still mostly empty for June. Most domestic HDG base prices currently range from $24.00 cwt. to $26.00 cwt. ($529 /mt to $573 /mt or $480 /nt to $520 /nt) ex-Midwest mills. Domestic offers for 0.019" x 48" G90 (0.48 mm x 1.219 m) range from $33.00 cwt. to $35.00 cwt. ($728 /mt to $772 /mt or $660 /nt to $700 /nt) ex-mill and offers for 0.012" x 40.875" G30 (0.30 mm x 1.04 m) range from $35.00 cwt. to $37.00 cwt. ($772 /mt to $816 /mt or $700 /nt to $740 /nt) ex-mill.
Domestic galvalume base prices range from $25.00 cwt. to $27.00 cwt. ($551 /mt to $595 /mt or $500 /nt to $540 /nt) and domestic offers for 0.019" x 41.5625" Gr80/AZ55 are offered at a range of $34.00 cwt. to $36.00 cwt. ($750 /mt to $794 /mt or $680 /nt to $720 /nt) ex-mill.
On the import side, for 0.019" G90 material, offers have largely trended sideways since last week with Taiwanese and South Korean offers still ranging from $35.00 cwt. to $37.00 cwt. duty-paid, FOB loaded truck in US West Coast ports. Indian offers continue to range from $34.00 cwt. to $36.00 cwt. in US Gulf Coast ports, while the competitive Chinese offers are found in the same range.
For 0.012" G30 material, Indian offers continue to range from $33.00 cwt. to $35.00 cwt. in Gulf ports, while competitive Chinese offers have shown up in the range of $34.00 cwt. to $36.00 cwt. in the Gulf. 0.012" offers from Mexico, Taiwan, and Korea all remain unchanged since last week, with Mexican and Korean offers found at $33.00 cwt. to $35.00 cwt. (Mexican offers are delivered at the border crossing while Korean offers are loaded truck in the West Coast). Taiwanese offers remain at a range of $35.00 cwt. to $37.00 cwt. on the West Coast.
Galvalume offers from foreign mills are also unchanged since last week with Taiwanese and Mexican offers of 0.019" Gr80/AZ55 ranging from $35.00 cwt. to $37.00 on the West Coast for Taiwanese material and at the border crossing for Mexican. South Korean offers range from $33.00 cwt. to $35.00 cwt. on the West Coast.
Data from the US Department of Commerce show that US imports of HDG sheet and strip totaled 115,516 mt in March 2009, which is down from the 2008 monthly average of 137,000 mt and from the year-ago total of 151,644 mt. Chinese HDG imports have decreased by an even sharper degree, totaling only 9,354 mt in March, compared to imports of 32,522 mt a year ago. In March 2009, the largest import HDG sources were Canada, at 31,269 mt; India, at 21,549 mt, and Taiwan, at 12,988 mt. Mexico, with 9,354 mt, and China rounded out the top five importers.
