On Monday, US domestic mills announced price increases on coated flat steel products following months of spot price declines. Severstal North America announced that new base prices on hot dipped galvanized (HDG) base would be $36.75 cwt. ($810/mt or $735/nt), and while there was no indication of previous base prices, the price represents a $1.75-$2.75 cwt. ($39-$61/mt or $35-$55/nt) increase over current spot prices in the range of $34.00-$35.00 cwt. ($750-$772/mt or $680-$700/nt) ex-Midwest mill. NLMK USA quickly followed Severstal, but announced a $2.00 cwt. ($44/mt or $40/nt) immediate increase. While a price increase has been strongly anticipated for a few weeks now, sources tell SteelOrbis the timing of the announcements was a surprise given a short holiday week this week and an expected sizeable drop in scrap prices this month.
Whether other flats mills will immediately follow suit is not yet certain but most mills are expected to make some sort of announcement to customers--whether by increase letter or through internal memos--sooner rather than later. Demand for HDG and Galvalume remains decent and with a number of mills taking some sort of production outage during July through September, production could slow enough to give the increase a chance of sticking, or at least help stabilize spot prices. However, with many taking extra days off this week due to the Independence Day holiday and scrap prices anticipated to drop as much $30/lt this month, the effect of the increase announcement may prove limited at least for another week.
Cwt. | Metric Ton (mt) | Net ton (nt) | Change from last week | |
US domestic HDG base price | $34.00-$35.00 | $750-$772 | $680-$700 | neutral |
0.012"x40.875" G30 | ||||
ex-Midwest mill | $44.00-$45.00 | $970-$992 | $880-$900 | neutral |
0.019"x48" G90 | ||||
ex-Midwest mill | $44.00-$46.00 | $970-$1,014 | $880-$920 | neutral |
US domestic Galvalume base price | ||||
ex-Midwest mill | $34.00-$35.00 | $750-$772 | $680-$700 | neutral |
0.019x41.5625 Gr80/AZ55 | ||||
ex-Midwest mill | $45.00-$46.00 | $992-$1,014 | $900-$920 | neutral |