US domestic HDG price slide finally comes to a halt

Last week's price increase announcements from Severstal North America and NLMK USA, and a $2.50 cwt. ($55/mt or $50/nt) immediate price increase letter from RG Steel Monday has put an end to the price slide that has characterized the US domestic flat rolled market since early October. US domestic hot rolled coil (HRC) and cold rolled coil (CRC) spot prices have begun to stabilize, and in turn, so have spot prices for coated flat steel products. Domestic HDG base spot prices have held steady in the last week in the range of $35.00-$37.00 cwt. ($772-$816/mt or $700-$740/nt), and spot prices for corresponding coating extras have stayed neutral as well. Domestic Galvalume base spot prices are $1.00 cwt. ($22/mt or $20/nt) lower than they were a week ago, having declined prior to price increases late last week, but are beginning to stabilize as well.

Market insiders have cast doubt at how effective the increases can be amid high production levels and only moderate demand, in addition to a drop of about $40-$50/lt in busheling scrap prices in November. However, the lower ends of the below ranges are becoming fewer and further between, although remain attainable for larger orders--such purchases have increased sharply in the last week, putting an end to extremely lethargic activity in the last few weeks. The spike in buying activity will likely settle soon, but if HDG mills are able to extend lead times beyond their current three to four weeks, spot prices may begin to firm up and stay that way, as opposed to the mild price increases in August and September that were followed by rapid erosion of spot prices throughout October.