The US hot dipped galvanized (HDG) market has accepted all of the domestic mills' price increases to date, with most offers for 0.019" by 48" G90 items currently ranging from $53.50 cwt. to $54.50 cwt. ($1,179 /mt to $1,202 /mt or $1,070 /nt to $1,090 /nt) FOB Midwest mills.
The price increases for April shipments were absorbed by the market, and it is possible that there will be another price increase in May, though there is also a chance that prices will finally start to level off in May.
Supplies are still relatively tight, and many of the larger mills have already closed their order books for April. End-use demand, however, is still not good, and after the rush of recent purchasing activity, customers may now be getting more comfortable with their inventories. In the short term, the pricing trend still remains slightly up, as there has not yet been an indication that the market has peaked. There is a possibility though, that due to the slow demand, prices may see a downward correction in the second half of the year.
The pricing trend for import HDG material remains strongly up, since the Asian and European flat rolled markets are very robust. Asian hot rolled prices in particular are shooting up, as mills are already factoring in the 65 percent hike in the recently agreed upon iron ore contract prices for 2008.
Currently, there are still very few import galvanized offers for the US. India is still in the market, but continues to raise its prices -- Indian offers for 0.012" by 40.875" G30 have jumped up by $20 to $30 /nt in the past two weeks, and now range from $57.00 to $59.00 cwt. ($1,257 /mt to $1,301 /mt or $1,140 /nt to $1,180 /nt) FOB loaded truck on the Gulf Coast.
There is also a trickle of 0.019" by 48" G90 offers from China, though they are not very competitive and are also trending upwards. The latest offers from China range from $53.00 cwt. to $54.00 cwt. ($1,168 /mt to $1,191 /mt or $1,060 /nt to $1,080 /nt) FOB loaded truck on the Gulf Coast.
Traders say that there have been some offers from Taiwan, but that they have very short validities with restricted tonnages. There aren't expected to be new offers from Taiwan for the next couple of weeks, but when the Taiwanese mills return to the market, their numbers are expected to be up significantly.
Import license data from the US Import Administration show that in January 2008, the US imported 119,717 mt of HDG sheet and strip, compared to 170,116 mt imported in January 2007. In January 2008, the most import HDG material came from: Canada, at 42,333 mt; China, at 24,496 mt; India, at 14,086 mt; Taiwan, at 10,919 mt; and South Korea, at 7,330 mt.
On the galvalume side of the market, domestic prices continue to rise and are now at a range of $52.00 cwt. to $54.00 cwt. ($1,146 /mt to $1,191 /mt or $1,040 /nt to $1,080 /nt) FOB mill. There are some import galvalume offers from India and South Korea, but they are sky-high. Most Indian offers are at the $55.00 cwt. ($1,213 /mt or $1,100 /nt) level, while South Korean material is around $56.75 cwt. ($1,251 /nt or $1,135 /nt.). Taiwan is in and out of the market.