Spot prices to increase further in US domestic HDG market

After increasing approximately $3.00 cwt. ($66/mt or $60/nt) since mid-February US domestic hot dipped galvanized (HDG) spot prices have settled, although the change appears to be only temporary.

Mills continue to make a strong push toward selling at the higher end of current HDG spot price ranges and while there is no deal-making to be observed-mill order books have been steady and have already begun moving into May-offers at the lower end of this week's ranges are readily available. But this seems to only be only temporary and spot ranges are expected to narrow and even increase through the final weeks of Q1.

Both spot HDG and Galvalume base prices are still in the $48.00-$50.00 cwt. ($1,058-$1,102/mt or $960-$1,000/nt) ex-Midwest mill range, with spot prices for the corresponding extras staying unchanged as well. Order activity for HDG is moving along steadily so far in March but demand for Galvalume is strengthening, and although spot ranges have not changed, most orders are being placed on the upper end.

Galvalume is also doing well south of the border and Mexican offers of Galvalume 0.019x41.5625 Gr80/AZ55 at $59.00-$61.00 cwt. ($1,301-$1,345/mt or $1,180-$1,220/nt) FOB loaded truck delivered to Houston ports are being booked often by US buyers despite a $1.00 cwt. increase in sales prices since last week. Mexican mills however are still not outwardly offering HDG products to the US, and while some orders have been booked in recent weeks, they have been minimal and on an inquire-only basis.

Offshore, Indian offers of both HDG and Galvalume coil have fallen, coming down $1.00 cwt. ($22/mt or $20/nt) on the HDG 0.012"x40.875" G30 and Galvalume 0.019x41.5625 Gr80/AZ55 items with offer prices now ranging from $54.00-$55.00 cwt. ($1,190-$1,213/mt or $1,080-$1,100/nt) and $55.00-$57.00 cwt. ($1,213-$1,257/mt or $1,100-$1,140/nt), respectively, both duty-paid FOB loaded truck in US Gulf ports. Additionally, Indian mills are offering rapid deliveries on orders placed today with delivery dates in late April/early May. The combination of sales prices as much as $5.00 cwt. ($110/mt or $100/nt) below US domestic spot prices and quick lead times is boding well for Indian mills, and both inquiries, as well as orders placed has risen this past week.

A few other imports are also available to the US and Chinese HDG offers in particular could become more attractive to US buyers in the near term as HDG prices in the Chinese domestic market have weakened over the past couple weeks, with no real pick-up expected in the foreseeable future.

Taiwanese offers of Galvalume to the US have already dipped $1.00 cwt. since last week to $56.00-$58.00 cwt. ($1,235-$1,279/mt or $1,120-$1,160/nt) duty-paid FOB loaded truck in US Gulf ports, as traders indicate that Taiwanese mills have been incrementally lowering prices over the past one to two weeks in order to negotiate their way into the US market.

**FOB loaded truck delivered to Houston ports