US domestic HDG prices soften further

In an effort to uphold spot prices for flat-rolled hot- and cold-rolled products, mills have been pushing price decreases downstream on coated products, resulting in a second consecutive week of softening hot dipped galvanized (HDG) spot prices.

After falling $1.00 cwt. ($22/mt or $20/nt) a week ago, US domestic HDG and Galvalume base spot prices have dipped another $1.00 cwt. on the low end over the past week, bringing current spot prices to $47.00-$49.00 cwt. ($1,036-$1,080/mt or $940-$980/nt) ex-Midwest mill. But in an effort to fill order books and compete with aggressive import offers, mills have been more willing to cut the cost of coating extras.

Spot prices of HDG 0.019"x48" G90 and Galvalume 0.019x41.5625 Gr80/AZ55 have fallen $1.00 cwt. over the past week and are now $58.00-$60.00 cwt. ($1,279-$1,323/mt or $1,160-$1,200/nt) ex-Midwest mill. Spot prices for HDG 0.012"x40.875" G30-a common construction item-are down $2.00 cwt. ($44/mt or $40/nt) over last week's reported ranges to $57.00-$59.00 cwt. ($1,257-$1,301/mt or $1,140-$1,180/nt) ex-Midwest mill.

Buyers have been wary of the apparent softening of the domestic HDG market, afraid to "buy at the top, and miss the bottom." Because overall demand levels are still relatively steady, HDG spot prices are not expected to decline further over the next couple weeks, as the spring months are generally stronger for the domestic HDG market, while a seasonal slowdown is expected to propel downward pricing in late Q2. And come late April/early May, already reduced import offers will likely fall further, putting additional pressure on the US HDG market.

HDG and Galvalume import offers to the US are unchanged from a week ago after falling as much as $3.00 cwt. ($66/mt or $60/nt) from mid-March to last week, and are expected to decline once again in late April. Indian offers of HDG 0.012"x40.875" G30 in the $52.00-$53.00 cwt. ($1,146-$1,168/mt or $1,040-$1,060/nt) duty-paid FOB loaded truck range for May shipment will likely fall closer to the Chinese 0.012"x40.875" G30 offer of $51.00-$52.00 cwt. ($1,124-$1,146/mt or $1,020-$1,040/nt) duty-paid FOB loaded truck in the latter half of April. Although import order activity has improved over the past few weeks, many US buyers are still reluctant of to act on significantly lower-priced import offers when the US domestic pricing trend is uncertain. SteelOrbis has learned that as a result, in an effort to entice US buyers and fill ships, Indian mills will likely become even more lenient on their HDG offer prices to US as the month progresses.

Elsewhere, traders note that as an attempt to grow their market share in the US, Taiwanese mills will soon begin to reduce their offer prices of HDG 0.019" x 48" G90, which currently range from $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.

South of the border, Mexican Galvalume offers to the US, which are currently $56.00-$58.00 cwt. ($1,235-$1,279/mt or $1,120-$1,160/nt) FOB loaded truck delivered into Houston ports, are too close to US domestic prices to generate strong trader interest at the moment.

**FOB loaded truck delivered into Houston