US domestic HDG market shows potential for firming

Price increases from US domestic flat rolled mills last week have not yet taken hold, but there is cause for optimism. Led by US Steel late Tuesday, domestic flats mills including Nucor, NLMK USA and AK Steel, among others, informed customers of an immediate $2.50 cwt. ($55/mt or $50/nt) price increase on hot rolled coil (HRC), cold rolled coil, and hot-dipped galvanized (HDG) coil. SteelOrbis sources indicated that while mills still allowed customers to place last minute orders in the days following the increase, starting this week, mills have shown more resolve in not taking orders below the current HDG base spot price range of $34.00-$36.00 cwt. ($750-$794/mt or $680-$720/nt) ex-Midwest mill, although prices have not yet firmed.

The direction of the US scrap market this month is anticipated to weigh heavily on mills' ability to raise prices. The trend is currently pointing upward, with predictions of how much prices will increase ranging from $10-$30/lt. Of course, the more significant the scrap increase is, the more clout mills will have in pushing for higher prices. Additionally, the lack of much import competition is also proving to be a positive for domestic mills. With offer prices out of China, India and Taiwan increasing in recent weeks and now only slightly below US spots, most customers are sticking primarily to domestic material.