Imports fight for market share in US HDG market

US domestic hot dipped galvanized (HDG) spot price ranges have remained neutral over the past week, however some import offer prices are still dropping.

Interest in HDG and Galvalume imports to the US has continued to be strong as some import offers have fallen as much as $5.00 cwt. ($110/mt or $100/nt) since early April. HDG 0.012"x40.875" G30 offers from India and China have both fallen $1.00 cwt. ($22/mt or $20/nt) since last week and now range from $51.00-$52.00 cwt. ($1,124-$1,146/mt or $1,020-$1,040/nt)  and $50.00-$51.00 cwt. ($1,102-$1,124/mt or $1,000-$1,020/nt), respectively, duty-paid FOB loaded truck in US Gulf ports. The $1.00 cwt. drop follows a $2.00-$3.00 cwt. ($44-$66/mt or $40-$60/nt) drop two weeks ago. The Chinese domestic HDG market in particular has been slow for about a month now-with prices dipping on a weekly basis since late February. Chinese domestic HDG prices have begun trending up modestly in the last week, although demand in the domestic HDG market in China continues to be light.

Other major drops are coming from south of the border. Mexican Galvalume 0.019x41.5625 Gr80/AZ55 offers to the US are now $54.00-$56.00 cwt ($1,190-$1,235/mt or $1,080-$1,120/nt) FOB loaded truck delivered into Houston-down $2.00 cwt. ($44/mt or $40/nt) in the last week, and down $5.00 cwt. since early April.

In addition to increases in HDG futures activity, arriving HDG imports have been flooding US ports in recent weeks. According to the Steel Import Monitoring and Analysis System (SIMA) US imports of HDG sheet and strip in March rose 30 percent from February imports of 69,975 mt (census data) to 99,640 mt (license data). And as of mid-April,SIMA data indicates that imports already total 76,663 mt (license data). So far in April, Korean mills have exported 15,190 mt of HDG sheet and strip to the US, up from 9,195 mt in March; Indian mills exported 22,223 mt to the US compared to 3,064 mt in March; China exported 14,330 mt of HDG sheet and strip to the US-a sharp climb from the 5,478 mt exported in March.

*Duty-paid FOB loaded truck in US Gulf ports

**FOB loaded truck delivered into Houston ports

As for US domestics, HDG spot prices are unchanged since last week although most orders are being placed on the lower end of the below ranges. And with US domestic hot rolled coil (HRC) spot prices having already fallen $1.00 cwt. on the low end in the last week to about $42.00-$44.00 cwt. ($926-$970/mt or $840-$880/nt) ex-Midwest mill, and some import offers as much as $7.00 cwt. ($154/mt or $140/nt) below domestic, the trend continues to point downward and spot prices will remain soft in the near future.