After a few weeks of remaining precariously stable, the flats market has softened, resulting in a decline in US domestic hot dipped galvanized (HDG) coil spot prices.
Since our last report a week ago, US domestic HDG base spot prices have slipped and can now be found between $38.00-$40.00 cwt. ($838-$882/mt or $760-$800/nt) ex-Midwest mill-a $1.00 cwt. ($22/mt or $20/nt) drop from last week. Meanwhile, the domestic Galvalume base spot price range widened by $1.00 cwt. on the low end into the range of $39.00-$41.00 cwt. ($860-$904/mt or $780-$820/nt) ex-Midwest mill, as mills have once again resorted to cutting prices to get orders. While activity in September was relatively steady, it was far from strong enough to support the amount of domestic capacity currently in play.
One glimmer of hope for flat-rolled spot prices comes from a decrease in the weekly US raw steel production rate the last two weeks. Data from the American Iron and Steel Institute (AISI) show that US raw steel production fell 3.8 percent last week, after a drop of 1.8 percent the week before, resulting in capacity utilization rate of 72.8 percent last week--the lowest level since the second week of this year. However, it remains to be seen whether the consecutive weekly declines are a result of planned maintenance outages at a number of domestic mills, or an actual attempt by domestic producers to relieve some of the pressure of overproduction. For now, considering that demand is only satisfactory and mill order books for November are empty, domestic HDG and Galvalume spot prices are likely to edge lower again by next week.
| Cwt. | Metric Ton (mt) | Net ton (nt) | Change from last week | |
| US domestic HDG base price | $38.00-$40.00 | $838-$882 | $760-$800 | ↓$1.00 cwt. |
| 0.012"x40.875" G30 | ||||
| ex-Midwest mill | $51.00-$52.00 | $1,124-$1,146 | $1,020-$1,040 | neutral |
| 0.019"x48" G90 | ||||
| ex-Midwest mill | $51.00-$53.00 | $1,124-$1,168 | $1,020-$1,060 | neutral |
| US domestic Galvalume base price | ||||
| ex-Midwest mill | $39.00-$41.00 | $860-$904 | $780-$820 | ↓$1.00 cwt. on low end |
| 0.019x41.5625 Gr80/AZ55 | ||||
| ex-Midwest mill | $50.00-$52.00 | $1,102-$1,146 | $1,000-$1,040 | neutral |
On the import side, activity has been lackluster for over two months now, but one common source of imported HDG and Galvalume coil in the US is aiming to change that. Traders have informed SteelOrbis that Taiwanese mills have been more inclined to cut deals to the US on HDG 0.019" x 48" G90 and Galvalume 0.019x41.5625 Gr80/AZ55 lately, and are likely to drop their offer prices soon in order to generate some activity. But Taiwanese HDG prices in the US are already substantially higher than US domestic spot prices, and so Taiwanese prices would have to fall significantly to attract the attention of buyers in the US.
| Import HDG offers to the US | Cwt. | Metric ton (mt) | Net ton (nt) | Change from last week |
| 0.012"x40.875" G30 | ||||
| India* | $50-$51 | $1,102-$1,124 | $1,000-$1,020 | neutral |
| China* | $48.50-$49.50 | $1,069-$1,091 | $970-$990 | neutral |
| Mexico** | $49-$50 | $1,080-$1,102 | $980-$1000 | neutral |
| 0.019" x 48" G90 | ||||
| China* | $49.50-$50.50 | $1,091-$1,113 | $990-1,010 | neutral |
| India* | $52-$54 | $1,146-$1,190 | $1,040-$1,080 | neutral |
| Mexico** | $49-$50 | $1,080-$1,102 | $980-$1000 | neutral |
| Taiwan* | $53-$55 | $1,168-$1,213 | $1,060-$1,100 | neutral |
| Import Galvalume offers to the US | ||||
| 0.019x41.5625 Gr80/AZ55 | ||||
| Taiwan* | $52.50-$53.50 | $1,157-$1,179 | $1,050-$1,070 | neutral |
| Mexico** | $50-$52 | $1,102-$1,146 | $1,000-$1,040 | neutral |
| China* | $52-$53 | $1,146-$1,168 | $1,040-$1,060 | neutral |
| India* | $53-$54 | $1,168-$1,190 | $1,060-$1,080 | neutral |
**DDP loaded truck delivered into Houston