Most US domestic flat rolled offers have remained stable since last week, although the US flats market overall seems to be softening somewhat as the domestic mills' November price hikes have fallen flat and offshore offers continue to drift downward.
On the hot dipped galvanized (HDG) side of the market, domestic offers generally remain at the October level and do not reflect further increases that mills announced last month for November and December shipments. Furthermore, there is some speculation that as the slow holiday season begins in November, mills will quickly catch up on all their late orders, and with their backlogs trimmed considerably, they may start to cut deals at sub-October price levels.
For now, US flat rolled mills are still pretty late on their deliveries and are still working off a decent-sized order backlog. The problem is that due to the aforementioned seasonal factors, there is a good chance that demand will have slowed further by the time this material is delivered. Meanwhile, domestic steel production has been on the rise for many weeks as mills ramped up their production to meet the Q3 up-tick in flat rolled orders. Now that production capacity has risen back up to 60 percent, there are concerns that these added capacities could ultimately cause the market to take a tumble if the current order log dries up.
On the end-use side, HDG demand is still somewhat stable, propped up by decent automotive demand (which is not as good as during "cash for clunkers," but still improved from the second quarter of this year) and good demand from the HVAC (heating, ventilating and air conditioning) market, which October is generally the strongest month for. However, HVAC business is expected to undergo a seasonal downturn in November and December, and metal building activity will likely continue to suffer for some time due to the poor state of the commercial construction market, which is not expected to recover for some time.
Currently, most US HDG base prices remain at a range of $33.00 cwt. to $35.00 cwt. ($728/mt to $772/mt or $660/nt to $700/nt). Domestic spot offers for 0.019" x 48" G90 (0.48 mm x 1.219 m) remain at a range of $44.00 cwt. to $46.00 cwt. ($970/mt to $1,014/mt or $880/nt to $920/nt) ex-Midwest mills. Offers for 0.012" x 40.875" G30 (0.30 mm x 1.04 m) still range from approximately $48.00 cwt. to $50.00 cwt. ($1,058/mt to $1,102/mt or $960/nt to $1,000/nt) ex-mill, Midwest. Domestic offers of Galvalume 0.019" x 41.5625" Gr.80/AZ55- aluminum and zinc alloy-coated sheet -range from $45.00 cwt. to $47.00 cwt. ($992/mt to $1,036/mt or $900/nt to $940/nt) ex-mill, Midwest.
On import, offers from Asia, led by China, continue to decline, though not at a particularly fast pace. So-called "tier 1" Chinese mills are still holding back from offering at low levels, while "tier 2" mills are a little more aggressive. India is also adjusting their prices downward in line with China, but very slowly. It is expected that import HDG numbers will continue to soften slightly in the near-term, no major downward push is foreseen. Even though import HDG has become considerably more competitively priced than domestic, buyers don't want to take the risk of buying import material that will not arrive until February. Furthermore, most buyers don't have the financing to do so. Traders say that the only interest in offshore coated product right now is for niche items or interest from some traders or service centers looking to do some small hedge buys.
Since last week, Chinese offers of 0.019" G90 to the US have dropped by about $1.00 cwt., with most offers now ranging from $39.00 cwt. to $40.00 cwt. ($860/mt to $882/mt or $780/nt to $800/nt) duty-paid, FOB loaded truck in US Gulf ports, while Chinese offers of 0.012" G30 are stable from last week and still range from approximately $40.00 cwt. to $41.00 cwt. ($882/mt to $904/mt or $800/nt to $820/nt) FOB loaded truck in US Gulf ports.
Indian 0.019" G90 offers continue to range from $41.50 cwt. to $42.50 cwt. ($915/mt to $937/mt or $830/nt to $850/tn) duty-paid, FOB loaded truck in US Gulf ports, and most 0.012" G30 offers still range from $42.50 cwt. to $43.50 cwt. ($937/mt to $959/mt or $850/nt to $870/nt) duty-paid, FOB loaded truck in US Gulf ports.
On the Galvalume end, there are still import offerings for the US of 0.019" AZ55 from India and China. Both sources are offering at an approximate range of $44.00 cwt. to $45.00 cwt. ($970/mt to $992/mt or $880/nt to $900/nt) duty-paid, FOB loaded truck in US Gulf ports.