After months of aggressive price cuts, US flat rolled mills are finally trying to firm up their prices, with most producers issuing July price hike announcements this week.
As of last week, it was not clear whether US flats mills would be able to raise prices for July to reflect the May increase in scrap busheling scrap prices, as scrap prices have backslid after rising in early May. However, following Nucor's $30 /nt ($33 /mt or $1.50 cwt.) flat rolled increase announced earlier this week, most other US flat rolled mills, minimills and integrated mills alike, are aiming to boost their prices by a similar amount for July shipments, with most producers issuing nearly identical notices that their prices will increase come July. It is too soon to tell whether the new prices will stick or if demand will be strong enough to for US flat rolled prices to embark on a lasting up-trend, but the across-the-board announcements by virtually all major US flats producers indicate that the mills, encouraged by their success in filling order books for June, are serious about establishing a new floor price.
On the hot dip galvanized (HDG) end of the market, US spot prices have yet to register any movement from last week, though the pricing trend is slightly up, as prices are expected to reflect part, if not all, of the announced price increase, which averages at about $30 /nt, within the next couple weeks. For now, domestic base sizes still range from $22.00 cwt. to $24.00 cwt. ($485 /mt to $529 /mt or $440 /nt to $480 /nt), while both 0.019” x 48” G90 (0.48 mm x 1.219 m) and 0.012” x 40.875” G30 (0.30 mm x 1.04 m) offers still range from $30.00 cwt. to $32.00 cwt. ($661 /mt to $705 /mt or $600 /nt to $640 /nt) ex-Midwest mills.
Domestic Galvalume base prices are still found at a range of $23.00 cwt. to $25.00 cwt. ($507 /mt to $551 /mt or $460 /nt to $500 /nt), with 0.019" x 41.5625" Gr80/AZ55 (0.48 mm x 1.219 m) still ranging from $32.00 cwt. to $34.00 cwt. ex-Midwest mills.
As per the July pricing notice issued by ArcelorMittal USA, the company will raise base prices for HDG to $24.50 cwt. ($540 /mt or $490 /nt), which reflects an increase of about $30 /nt from the current spot price. But again, it is not certain yet that customers will accept this increase or whether all mills will raise prices by the same amount, across the board, for all customers, applying all of the applicable extras. It is possible that some mills may still be willing to do some discounts for certain customers in order to keep ahead of the competition, especially if they don't start to quickly fill their order books. However, judging from this week's price hike announcements, just about all of which cite “unreasonably low spot prices” and the need to recover raw material costs, US mills seem to be putting up a united front in their efforts to raise prices.
Meanwhile, flat rolled import activity is, as one trader put it, “as quiet as can be.” Import HDG offers are still available, primarily from Asian sources, but they just don't make sense for US buyers right now since imports are still offered at a premium to the domestic price, even taking into account the domestic $30 /nt July increase. Import sources can still demand higher prices from their home market and have little interest in the US right now, especially as the threat of a dumping case on coated products still looms over the market.
Most offers of 0.019” G90 from Taiwan for the US continue to range from $35.00 cwt. to $37.00 cwt. ($772 /mt to $816 /mt or $700 /nt to $740 /nt) duty-paid, loaded truck in US West Coast ports, while Taiwanese 0.012” G30 offers are still ranging 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.
Korean HDG offers of both 0.019” G90 and 0.012” G30 continue to range ranging from $34.00 cwt. to $36.00 cwt. ($750 /mt to $794 /mt or $680 /nt to $720 /nt) duty-paid, loaded truck, in US West Coast ports.
China is still offering at the same range as last week, with 0.019” G90 offers ranging from $32.00 cwt. to $34.00 cwt. ($705 /mt to $750 /mt or $640 /nt to $680 /nt) in the Gulf, and 0.012” offers ranging from $34.00 cwt. to $36.00 cwt. in the Gulf.
Mexico is still the most competitive import source for 0.012” G30 in terms of prices, with offers still found at range of $33.00 cwt. to $35.00 cwt. ($728 /mt to $772 /mt or $660 /nt to $700 /nt) at the US border crossing. However, there are hardly any Mexican offers out there, as the major mills claim to be booked through July. Offers are generally only on an inquiry basis.
On the Galvalume end, Taiwanese offers of 0.019" AZ55 still range from $35.00 cwt. to $37.00 cwt. on the West Coast, while Korean offers are still found at a range of of $33.00 cwt. to $35.00 cwt. on the West Coast. Mexican Galvalume offers are found at a range of $33.00 cwt. to $35.00 cwt. at the US border crossing.