US domestic HDG prices begin their descent

With the market uncertainty that had been propping up US domestic hot dipped galvanized (HDG) and Galvalume spot prices now gone, the market is quickly weakening. While ArcelorMittal and the USW union only reached an agreement this past weekend, it became clear about one week ago that there would likely be no strike at the mills (and therefore no fears of a supply shortage), which rapidly sent prices tumbling. Additionally, scrap prices for September have settled decidedly lower, with the largest decrease evident in Midwest busheling prices. As a result, buyers have been more adamant about getting discounts on new flat rolled orders, and with lead times on coated products only about four to five weeks (and one to two weeks on hot rolled coil), mills have had to be increasingly flexible.

As a result, domestic HDG base prices have fallen $0.50 cwt. ($11/mt or $10/nt) since last week to $36.50-$37.50 cwt. ($805-$849/mt or $730-$770/nt) ex-Midwest mill and prices on the higher end are dissipating. HDG 0.012"x40.875" G30  and HDG 0.019"x48" G90 spot   prices have also dropped by $0.50 cwt. since last week and lower deals are already rumored to be available from a few mills with lighter order books. Meanwhile, Galvalume base spot prices are still between $37.00-$38.00 cwt. ($816-$838/mt or $740-$760/nt) ex-Midwest mill, as they were a week ago, but Galvalume 0.019x41.5625 Gr80/AZ55 spot prices have slipped by $0.50 cwt. Prices are unraveling quickly, according to SteelOrbis sources, and any boost in prices that mills were able to achieve from July-announced increases will dissolve first.