Trend for US domestic HDG market still slipping

The US domestic hot dip galvanized (HDG) market has softened since our last report a week ago and prices could dip once again before the end of November.

While the general domestic HDG spot price range is similar to last week's, at approximately $31.00-$33.00 cwt. ($683-$727/mt or $620-$660/nt) ex- Midwest mill, the majority of newer transactions are now being reported at the lower end of the range.

Meanwhile, domestic spot prices for extras have come down $1.00 cwt. ($22/mt or $20/nt) this week for both Galvanized 0.019"x 48 G90 and 0.012" G30, and are both being reported at approximately $41.00-$43.00 cwt. ($904-$948/mt or $820-$860/nt) ex-Midwest mill. Since many mills have become increasingly flexible in offering deals on product with extras, buyers with the right order size may be able to strike a deal slightly below the above-mentioned range.

Domestic Galvalume prices have also trended down this week.  Although the base price is relatively unchanged from a week ago, spot prices for the 0.019x41.5625 Gr80/AZ55 product have come down $2.00 cwt. ($44/mt or $40/nt) on the low end.

However, prices appear to be nearing absolute bottom, and are expected to remain soft through November as buyers do not want high inventory levels at the end of the year. Nevertheless, prices could firm back up by mid-December when buyers begin to place orders for product to be delivered in early, to mid-January. As of right now though, buyers continue to have the upper hand- "everything is negotiable these days...if you come to a mill with $10,000+ tons, ‘name your price' becomes the name of the game" said one East Coast trader.

As for imports, although China has dropped its sales price by $1.00 cwt. on certain coated products, interest in offshore offerings remains close to non-existent. Mexico, however, remains aggressive in its price reductions and has once again taken down its price another $1.00-$2.00 cwt. and now offers its coated products, on average, slightly under US domestic offers.