Import market follows US HDG spot prices down

Import offers to the US have become more attractive in the last week, following rapid softening in the US domestic hot dipped galvanized (HDG) market.

With demand for coated flat steel products still mostly steady, but appearing to be leveling off with the approach of the late fall and winter months, order activity at US domestic HDG mills is slowing, and with rumblings surfacing that a couple mills are undercutting the competition and striking what one East Coast buyer cited as "deals so low they're eye-raising," below market prices have become more common, resulting in domestic HDG base spot prices declining $1.00 cwt. ($22/mt or $20/nt) in the last week into the range of $37.00-$39.00 cwt. ($816-$860/mt or $740-$780/nt) ex-Midwest mill. Spot prices for coating extras are falling as well as mills have become increasingly aggressive on the costs of extras. As a result, spot prices for HDG 0.012"x40.875" G30 and 0.019"x48" G90 are likely to slide below $50.00 cwt. ($1,102/mt or $1,000/nt) in the next week or two, after falling $1.00 cwt. in the last seven days.

Domestic demand for Galvalume is especially slow at the moment, and activity below the range of $38.00-$39.00 cwt. ($838-$860/mt or $760-$780/nt) for Galvalume base and Galvalume 0.019x41.5625 Gr80/AZ55 between $50.00-$51.00 cwt. ($50.00-$51.00/mt or $1,000-$1,020/nt) ex-Midwest mill, both down about $1.00 cwt. since last week, is growing in prevalence, as a lack of construction-related activity is keeping Galvalume demand quiet. Buyers tell SteelOrbis that with the expectation that demand will remain depressed until at least year's end and oversupply more than likely to pressure flats prices down again for at least the next couple weeks, many domestic distributors are not only keeping a tight lid on inventories, but are attempting to sell off any excess as rapidly as possible.

Import HDG and Galvalume prices in the US are poised to keep falling as well, after most offshore sources broke their months-long neutral trend in the last week--some lowering prices substantially. Import Galvalume 0.019x41.5625 Gr80/AZ55 offers from China dropped $2.00 cwt. ($44/mt or $40/nt) in the last week into a similar range as US domestic spot prices, while Chinese 0.019" x 48" G90 sales prices in the US are down $1.00 cwt. since last week to $48.50-$49.50 cwt. ($1,069-$1,091/mt or $970-$990/nt) DDP loaded truck in US Gulf ports.

Other notable import offers are lower as well (see below chart), and according to trader sources a continued decline in import prices will likely continue through at least the end of October, as offshore mills attempt to once again become relevant in the US market, after about two months of nearly silent activity. However, considering the rapid pace of softening in the US domestic market, import prices will have to fall considerably to convince US buyers to even consider booking anything offshore.

**DDP loaded truck delivered into Houston