As expected, after US busheling scrap prices rose $10/ton last week, a price hike for domestic flat rolled has followed. However, the market does not seem to be absorbing the increase.
Despite US Steel advising customers this week that they will raise offers by approximately $40/nt ($44/mt or $2.00 cwt.), putting the HDG base prices at $39.00 cwt., domestic HDG spot offers have remained stable for the second week in a row, and many suspect that the up-trend that US flat rolled prices have followed since the beginning of the year may have finally run out of steam. Perhaps as an indication of the market's cool reaction to US Steel's increase, no other US flat rolled mills have yet followed with their own.
Since last week, most domestic HDG offers have remained at a range of $36.00 cwt. to $37.00 cwt. ($794/mt to $816/mt or $720/nt to $740/nt) ex-Midwest mills, while offers of 0.019" x 48" G90 (0.48 mm x 1.219 m) now range from $47.00 cwt. to $48.00 cwt. ($1,036/mt to $1,058/mt or $940/nt to $960/nt) ex-Midwest mills. Domestic offers of 0.012" x 40.875" G30 (0.30 mm x 1.04 m) continue to range from approximately $49.00 cwt. to $51.00 cwt. ($1,080/mt to $1,124/mt or $980/nt to $1,020/nt) ex-Midwest mills. Domestic Galvalume offers are also stable since last week, with most base prices still ranging from $36.00 cwt. to $37.00 cwt. and 0.019" x 41.5625" Gr80/AZ55 still ranging from $47.00 cwt. to $48.00 cwt. ex-Midwest mills.
With demand remaining flat, and US scrap prices rising only slightly this month, the US HDG market does not seem to be ready to absorb any more price increases at present. Although scrap prices could rise slightly in upcoming weeks, the string of large increases seen in previous months has concluded. Zinc prices also continue to trend down, and the softening of this raw material is also affecting spot pricing for US HDG. Finally, import HDG prices are also trending down. All of these factors together are leading many to believe that the current domestic price stability may soon give way to a downward trend.
Chinese offers have decreased by approximately $1.00 cwt from last week, with prices now ranging between $44.00 cwt to $46.00 cwt ($970/mt to 1,014/mt or $880 to $920/nt). However, in and of itself, this price change is not likely to have a major affect on the US market, as most customers remain uninterested in booking imports despite a slight cost advantage. That said, if Chinese and other offshore HDG offer prices continue to trend down, this dynamic could change as domestic mills may lower prices so as not to lose market share to imports. Current import indications for 0.019" G90 are from both India and Taiwan are at about $47.00 cwt. ($1,036/mt or $940/nt), duty-paid, FOB loaded truck in US Gulf ports. These offers are stable from last week, based on the latest indications from mills from these regions, the price trend is down, following China's move.
Indications for 0.012" G30 from India range from $46.00cwt to $48.00 cwt ($1,014/mt to $1,036/mt or $920/nt to $960/nt) while Taiwanese offers of the same product are currently at about $47.00cwt and higher, both duty-paid, FOB loaded truck in US Gulf ports. Taiwanese Galvalume offers have also remained stable at $47.50 cwt. and higher, while Mexico is offering some Galvalume to the US at a range of $48.00cwt to $49/cwt (1,036/mt to $1,080/mt or $960/nt to $980/nt) delivered to US border states.