US domestic hot dipped galvanized (HDG) spot prices have slipped again this week, but recent US mill price announcements may prevent further price erosion in the immediate future.
In terms of new base prices, US mill price announcements in the last couple weeks have not been uniform. On May 17, Severstal North America led the price increases by setting its HDG base prices at $47.00 cwt. ($1,036/mt or $940/nt) ex-mill. In the following week, AK Steel announced an HDG base price increase of $3.00 cwt. ($66/mt or $60/nt), followed by $2.00 cwt. ($44/mt or $40/nt) base price hikes from NLMK Indiana, Duferco Farrell and Sharon Coating, and Nucor Corporation.
US domestic asking prices on HDG base now range from $45.00-$47.00 cwt. ($992-$1,036/mt or $900-$940/nt) ex-Midwest mill depending on the mill. Nonetheless, HDG and Galvalume base spot prices are still about $2.00 cwt. ($44/mt or $40/nt) under most mill asking prices at $43.00-$45.00 cwt. ($948-$992/mt or $860-$900/nt) ex-Midwest mill, down $1.00 cwt. ($22/mt or $20/nt) since last week.
Spot prices for coating extras have also fallen since our last report a week ago, and are down $1.00 cwt. across the board. HDG 0.019"x48" G90 and Galvalume 0.019x41.5625 Gr80/AZ55 spot prices are now both $54.00-$56.00 cwt. ($1,190-$1,235/mt or $1,080-$1,120/nt) ex-Midwest mill. Spot prices on HDG 0.012"x40.875" G30 now range from $53.00-$55.00 cwt. ($1,168-$1,213/mt or $1,060-$1,100/nt) ex-Midwest mill.
With at least four of the major US flats mills on board to "stop the bleeding," and other mills likely to follow, HDG base spot prices may begin to level out in the next few weeks-especially considering that purchasing activity has perked up since Severstal's announcement. The long-term outlook for domestic flats prices is more uncertain however, as new capacity coming on stream is still a major concern for domestic buyers. While the new capacity (TK's Alabama mill, RG Steel mills which recently announced re-entry into the HDG market, and upgrades at Severstal's Columbus, Mississippi mill) have not exactly inundated the marketplace with steel just yet, they are still "working out the kinks," according to one Southeast distributor, and the additional capacity will be felt more dramatically in late Q2/early Q3, when the typical summer slowdown is already putting downward pressure on spot prices.
Looking offshore, traders tell SteelOrbis that US buyers don't have much of an appetite for imports right now, having bought well into Q3. Nonetheless, after falling last week, HDG and Galvalume import offers to the US have not moved in the last week. For HDG 0.012"x40.875" G30, Indian and Chinese offers are still $50.00-$52.00 cwt. ($1,102-$1,146/mt or $1,000-$1,040/nt), and $49.50-$50.50 cwt. ($1,091-$1,113/mt or $990-$1,010/nt), respectively, both DDP loaded truck in US Gulf ports. Chinese HDG 0.019" x 48" G90 offer prices to the US are within the same range. Mexican HDG 0.012"x40.875" G30 offers range from $51.00-$53.00 cwt. ($1,124-$1,168/mt or $1,020-$1,060/nt) DDP loaded truck delivered into Houston.
Other offers of HDG 0.019" x 48" G90 are coming from India at $52.00-$54.00 cwt. ($1,146-$1,190/mt or $,1040-$1,080/nt) DDP loaded truck in US Gulf ports, and Taiwanese offers are still uncompetitive at $55.00-$56.00 cwt. ($1,213-$1,235/mt or $1,100-$1,120/nt) DDP loaded truck in US Gulf ports.
As for Galvalume 0.019x41.5625 Gr80/AZ55, Indian, Taiwanese and Chinese offers are still $52.00-$53.00 cwt. ($1,146-$1,168/mt or $1,040-$1,060/nt) DDP loaded truck in US Gulf ports. Some activity has been heard south of the border, as Mexican mills have been offering a few deals below their official offer price of $52.00-$53.00 cwt. DDP loaded truck delivered into Houston.