With
US flat rolled producers' second round of price increases announced this month, mills are aiming to push hot dip
galvanized (HDG) spot prices up by at least another $40 /nt to $60 /nt ($44 /mt to $66 /mt or $2.00 cwt. to $3.00 cwt.).
Following the widespread $30 /nt ($33 /mt or $1.50 cwt.) spot price increase for July orders announced by
US flat rolled mills two weeks ago, most major mills this week announced further price hikes on all flat rolled products ranging from $30 /nt to $90 /nt ($33/mt to $99 /mt or $1.50 cwt. to $4.50 cwt.). For HDG products, the latest round of increases range from $40 /nt to $90 /nt ($44 /mt to $99 /mt or $2.00 cwt. to $4.50 cwt.). However, it is assumed that
Nucor's “minimum $40 /nt” increase on HDG will be the one that sticks rather than
ArcelorMittal USA's and
Severstal NA's steeper $90 /nt hike. Nevertheless, buyers report that not all
Nucor customers are getting the “minimum” increase and the mill is charging most customers a $60 /nt ($66 /mt or $3.00 cwt.) premium, plus full extras.
While HDG spot prices may not rise to
ArcelorMittal's $90 /nt increase to reach a $29.00 cwt. ($639 /mt or $580 /nt) base just yet, a $27.00 cwt. ($595 /mt or $540 /nt) base, or a $60 /nt increase from the previous levels, is, as mentioned, the going rate from market leader
Nucor. However, it is likely that
Nucor and its competitors will cut different deals with different customers depending on who it is and what they want to buy. For comparison, HDG base prices were being quoted at a range of $22.00 cwt. to $24.00 cwt. ($485 /mt to $529 /mt or $440 /nt to $480 /nt) earlier this month before the two rounds of price increases were announced.
“This thing seems to be picking up speed very quickly,” one trader commented to SteelOrbis. Lead times have already stretched out to late August, compared to the first week of August for orders placed at the start of the week. Although flat rolled
consumption remains relatively weak, it seems that service center inventories, which hit a 22-year low in May, have finally caught up with demand, or are perhaps even slightly behind demand, weak as it is.
There still aren't a great deal of tons that need to be booked to support the current demand, but buyers are starting to fill holes in their inventories, and the recent price increases and lengthened lead times have spurred buyers that had been waiting on the sidelines into action as they seek to protect themselves from further increases. It remains to be seen how long the current up-trend will last once customers have restocked their inventories, but as of now, things are looking strong going into the third quarter, with a high likelihood of more increases come September and October.
With HDG base prices rising by approximately $60 /nt and mills charging full extras again, offers for the most common domestically-produced HDG size and coating, 0.019” x 48” G90 (0.48 mm x 1.219 m) are now at about $35.50 cwt. ($783 /mt or $710 /nt) ex-Midwest millsl, while 0.012” x 40.875” G30 (0.30 mm x 1.04 m) are now at about $39.00 cwt. ($860 /mt or $780 /nt) ex-mill in the Midwest. But again, these prices may be somewhat negotiable depending on mill, tonnage, and customer.
It is worth noting that the recent flat rolled price increases are for spot business only, while contract business that is tied to raw material costs, will not reflect these increases. In fact, contractual business tied to the CRU index will actually register a price decrease in July/August.
Meanwhile, HDG imports are still not competitive, and this is also helping to support the domestic price increases. Most HDG imports are still found at the same price ranges as reported last week, and even with latest domestic price increases and lengthening of domestic lead times, imports are still not attractive to most buyers by comparison.
On the 0.019” G90 side, offers for the
US from Chinese mills remain at a level of $36.00 cwt. to $38.00 cwt. ($794 /mt to $838 /mt or $720 /nt to $760 /nt), duty-paid, loaded truck, in
US Gulf Coast ports while South Korean offers range from $37.00 cwt. to $38.00 cwt ($816 /mt to $838 /mt or $740 /nt to $760 /nt) duty-paid, loaded truck, in
US West Coast ports.
For 0.012” G30,
India is offering at a range of $35.00 cwt. to $37.00 cwt. ($772 /mt to $816 /mt or $700 /nt to $740 /nt) duty-paid, loaded truck, in
US Gulf Coast ports, while
Korea is offering at $39.00 cwt. to $41.00 cwt. ($860 /mt to $904 /mt or $780 /nt to $820 /nt) duty-paid, loaded truck, in
US Gulf Coast ports.
The latest Taiwanese price indications for both 0.012” G30 and 0.019” G90 are in line with Korean offers.