Less import competition, longer lead times, give US HDG prices a boost

Coated flat steel spot prices in the US have continued to strengthen in recent weeks, with a number of factors working together to allow mills to stand firm. For both hot dipped galvanized (HDG) and Galvalume coil products, lead times have almost entirely moved into September. While some sources speculate that lead times are not as strong as some mills claim, the majority of mills have generally been resolute in attaining their official asking prices following three rounds of price increases. As a result, HDG base prices are up another $1.00 cwt. ($22/mt or $20/nt) on the low end to $36.00-$37.00 cwt. ($794-$816/mt or $720-$740/nt) ex-Midwest mill, although the bulk of activity is taking place closer to $37.00 cwt. Spots for corresponding extras have risen in tandem, up $1.00 cwt. since last week.

Long lead times have also benefited US domestic Galvalume coil spots, but improved demand and reduced import competition have allowed Galvalume prices to rise faster than prices for HDG coil. Galvalume coil base spot prices are up $0.50 cwt. ($11/mt or $10/nt) in the last week to $36.50-$37.50 cwt. ($805-$827/mt or $730-$750/nt) ex-Midwest mill. Domestic mills' biggest Galvalume competition comes from south of the border, but Mexican mills overbooked and were forced to turn away orders, pushing US buyers to scramble a bit to put in their orders with domestic mills. US mills are already rumored to announce a fourth round of price increases in the near future, which is expected to further the upward momentum.