Price trend begins to shift in US domestic HDG market

Spot prices in the US domestic hot-dipped galvanized (HDG) market have decreased since our last report a week ago, as buyers are finding less difficulty in negotiating official mill asking prices.

Since late March, domestic order activity for HDG has begun to soften somewhat, with more and more buyer pushback arising. Deal-making has re-emerged in the domestic flat-rolled market on the whole from producers looking to fill order books. HDG and Galvalume base spot prices have fallen $1.00 cwt. ($22/mt or $20/nt) since our last report a week ago and are now in the $48.00-$49.00 cwt. ($1,058-$1,080/mt or $960-$980/nt) ex-Midwest mill range.

The most commonly reported spot prices for coating extras have also dropped $1.00 cwt. over the last week, however more deals have been cut on some products than others. While no orders for HDG 0.019"x48" G90 have been heard below this week's ranges of $59.00-$61.00 cwt. ($1,301-$1,345/mt or $1,180-$1,220/nt) ex-Midwest mill, a few deals as much as $1.00 cwt. below this week's HDG 0.012"x40.875" G30 range of $59.00-$61.00 cwt. ex-mill have been reported.

In a likely attempt to stem weakening HDG prices, some flat-rolled mills indicated to customers in the latter half of the week ending April 1 that another price increase will be issued during this week, ending April 8. Another price increase would be the first official announcement since mid-to-late February. Along with higher busheling scrap prices for April (already up about $30/lt on the East Coast), mills may be able to slow the decline of flat-rolled spot prices in the immediate future. But whether or not another official mill-announced price increase will actually give a boost to spot prices is unlikely. Order activity has already showed signs of slowing, while certain import offers have dropped significantly in the last week.

Inquiries into HDG and Galvalume offers for the US have been plentiful over the past week with the number of bookings having increased as well. The most competitive HDG offers are being generated from China, which has been offering some US buyers price cuts on its already low offers. Chinese offers of HDG 0.012"x40.875" G30 have fallen $3.00 cwt. ($66/mt or $60/nt) on the high end and $2.00 cwt. ($44/mt or $40/nt) on the low end since our last report a week ago. Current offers are now $7.00-$8.00 cwt. ($154-$176/mt or $140-$160/nt) below US prices and are in the $51.00-$52.00 cwt. ($1,124-$1,146/mt or $1,020-$1,040/nt) duty-paid FOB loaded truck in US Gulf ports range for delivery in June and July.

South of the border, Mexico-a major Galvalume exporter to the US-has dropped its offer prices for the US $3.00 cwt. on Galvalume 0.019x41.5625 Gr80/AZ55 to $56.00-$58.00 cwt. ($1,235-$1,279/mt or $1,120-$1,160/nt) FOB loaded truck delivered into Houston.

**FOB loaded truck delivered into Houston