Hot dip galvanized (HDG) coil prices in the US continue to soften, with domestic mills, as one flat rolled trader put it, "chasing the price down."
Domestic HDG prices have come down further in the last week as US mills continue to offer aggressively, all but silencing any import competition. Import prices have come down as well, but largely in response to the domestic price drops, and domestic offers are still the most competitive.
Traders say that while import HDG offers for the US are still negotiable and on a softening trend, rather than throwing out low-priced offers, foreign mills are preferring to sit on the sidelines and do business on a "bid" basis, only quoting when a customer approaches them with a firm bid. Domestic mills, on the other hand, are offering ever-lower prices because they are hungry for the business and don't want to lose out to cheaper import offers. There is virtually no import advantage in the US HDG market right now, except, perhaps, for some niche and specialty items that can't be found domestically.
While US HDG prices are expected to continue trending slightly down, particularly on the domestic side, on a positive note, service center inventories continue to decline, and downstream consumers say that business seems to be leveling off rather than getting increasingly worse every month. With such low inventory levels, any slight increase in demand could send the market skyrocketing upwards.
Since last week, domestic galvanized base prices have dropped by about $1.00 cwt ($22 /mt or $20 /nt), on average, with base prices falling to a range of $26.00 cwt. to $28.00 cwt. ($573 /mt to $617 /mt or $520 /nt to $560 /nt) ex-Midwest mills. Notably, this is the same price that domestic cold rolled is offered at. Since galvanized base prices are usually higher than CRC, the current lack of a price gap is indicative of just how weak the HDG market is.
Domestic offers of 0.019" x 48" G90 (0.48 mm x 1.219 m) have also dropped by about $1.00 cwt. since last week with most offers now ranging from $35.00 cwt. to $37.00 cwt. ($772 /mt to $816 /mt or $700 /nt to $740 /nt) ex-mill. Domestic 0.012" x 4.875" G30 (0.30 mm x 1.04 m) offers are steady from last week, with most offers still ranging from $36.00 cwt. to $38.00 cwt. ($784 /mt to $838 /mt or $720 /nt to $760 /nt) ex-mill.
Domestic galvalume base prices and 0.019" x 41.5625" Gr80/AZ55 prices have also come down by $1.00 cwt. since last week, with base prices now at $27.00 cwt. to $29.00 cwt. ($595 /mt to $639 /mt or $540 /nt to $580 /nt) ex-mill and AZ55 now offered at $36.00 cwt. to $38.00 cwt. ex-mill.
As for imports, Taiwanese and South Korean offers of 0.019" G90 have appeared on the scene, though they they are not the most competitive sources out there, with most offers ranging from $35.00 cwt. to $37.00 cwt. duty-paid, FOB loaded truck in US West Coast ports. Indian offers are the most competitive at a range of $34.00 cwt. to $36.00 cwt. ($750 /mt to $794 /mt or $680 /nt to $720 nt) duty-paid FOB loaded truck in US Gulf ports; however, as mentioned above, there is very little interest in imports right now due to the more competitive domestic offers, as well as the risk that comes with buying imports with long lead times in a down-trending market.
For import offers of 0.012" G30, Indian and Taiwanese offers have remained at the same levels as last week, with Indian offers ranging from $35.00 cwt. to $37.00 cwt. duty-paid, FOB loaded truck in US Gulf ports and Taiwanese offers ranging from $36.00 cwt. to $38.00 cwt. duty-paid, FOB loaded truck in US West Coast ports. Chinese offers have also come down to the $36.00 cwt. to $38.00 cwt. duty-paid, FOB loaded truck in US Gulf ports level, but there is very little interest in these offers since the offers of other sources are still generally more competitive. Meanwhile Mexican offers have come down by about $1.00 cwt. since last week, with most offers ranging from $35.00 cwt. to $37.00 cwt. at the border crossing.
Import galvalume offers (Gr80/AZ55)have declined by $1.00 cwt. across the board since last week, with offers from Taiwan, Mexico, India, and South Korea all ranging from $36.00 cwt. to $38.00 cwt. (Mexican offers are at the border crossing and the Indian offers are duty-paid, FOB loaded truck in US Gulf ports. Taiwanese and Korean are duty-paid, FOB loaded truck in US West Coast ports).