US hot-dipped galvanized (HDG) coil prices continue to rise along with the price of hot rolled coils, increasing by approximately $60 /nt ($66 /mt or $3.00 cwt.) so far for March shipments over February.
Most domestic offers for 0.019" by 48" G90 items now range from $51.50 cwt. to $52.50 cwt. ($1,135 /mt to $1,157 mt or $1,030 /nt to $1,050 /nt) FOB Midwest mills. On the West Coast, the pricing level is approximately $2.00 cwt. ($22 /mt or $20 /nt) higher than the Midwest level.
Although it was speculated that it might take some more time for this latest round of increases to stick, mills are reportedly filling up their order books nicely as buyers scramble to get any available tonnage.
There is still no apparent improvement in end-user demand for galvanized sheet, most of which goes into the construction and automotive markets. However, stockists and re-rollers are buying in order to hedge against more price increases, as well as to replenish their inventories, which are still at low levels due to the lack of imports.
It is expected that hot rolled prices and, in turn, galvanized prices, will rise again next month, as mills will keep raising prices as long as the customers are willing to pay. However, that threshold may be reached sooner rather than later; the latest service center inventory data from the Metals Service Center Institute (MSCI) show that while inventories are still at low levels compared to a year ago, they started to inch upwards again in December. MSCI reported that US steel inventories were up one percent in December from the previous month, to 12.26 million nt.
With end-use demand still being extremely slow, once inventories rise to sufficient levels for stockists to feel comfortable, the current upward pricing trend may quickly turn around.
Most foreign mills are still refraining from offering galvanized material to the US due to the rapidly rising hot rolled coil prices both in the US and abroad, particularly in Asia. For this reason, the pricing trend for import galvanized offers remains strongly up.
There are some scattered offers for 0.019" by 48" G90 items from China, though they are rare and often short-lived. The current pricing level for US customers is approximately $53.00 cwt. to $54.00 cwt. ($1,168 /mt to $1,191 /mt or $1,060 /nt to $1,080 /nt) FOB loaded truck on the Gulf Coast.
For the most commonly imported galvanized item (0.012" by 40.875" G30) there are still virtually no offers available. India is expected to return to the market with a significant price rise, but currently, there are no firm offers.
Final census data from the US Import Administration show that the total amount of import HDG sheet and strip that arrived to the US in 2007 through November is 1,738,019 mt, down from 3,101,080 mt imported during the same period of 2006. The US' largest import source for HDG during the 2007 period was Canada, with 416,348 mt mt; followed by China, with 326,155 mt; then India, at 190,366 mt, Brazil, at 182,311 mt; and South Korea, at 159,279 mt.
Galvalume prices also continue to rise; domestic prices for 26-gauge 0.019" by 41.5625" to 43" AZ55 currently range from approximately $50.00 cwt. to $51.00 cwt. ($1,102 /mt to $1,124 /mt or $1,000 /nt to $1,020 /nt), representing an increase of $5.00 cwt. ($110 /mt or $100 /nt) in the last two weeks alone. Taiwanese mills are offering some galvalume material to the US at a comparable price range to domestic.