US HDG buyers still mulling August price hikes

While the $30/nt ($33/mt or $1.50 cwt.) price increase US flat rolled producers announced earlier this month was considered a “slam dunk,” customers are showing a little more resistance to the second round of increases announced over the past week.

US flat rolled mills were able to quickly fill up their July order books after announcing a $30/nt price hike in early June. In fact, many mills ended up overbooking July, which has pushed out most lead times into the first couple weeks of August. However, while the July price hike was a resounding success and prompted many buyers that were on the fence to place some orders, buyers are having a harder time digesting the second round of increases announced by US mills this week and last.

As SteelOrbis has reported, many US flat rolled mills, including ArcelorMittal USA, Nucor, Severstal NA, AK Steel, California Steel Industries and others, have issued another round of price hikes in the past week, effective for August deliveries, pushing hot dip galvanized base prices up by another $2.00 cwt. to $4.50 cwt. ($44 /mt to $99 /mt or $40 /nt to $90 /nt) from the July numbers. Taking into account the August hikes, the new asking range for HDG base prices from domestic mills is $27.00 cwt. to $29.00 cwt. ($595 /mt to $639 /mt or $540 /nt to $580 /nt). However, no one is booking at these new prices yet. Buyers still want to book at the July prices, but mills aren't interested. So for now, producers and buyers in a stand-off of sorts.

It is generally thought that at least some of the August increase will end up sticking, but the question is how much. There are doubts as to weather the latest increase will be fully implemented, especially if mills aren't able to book much business at the new levels. Still, there is a good chance that the mills may try to shore up the August increase by announcing another increase next month. It is a bit early to speculate about a September increase, but considering that the July increase wasn't fully accepted until the August increase was announced, mills could very well use this same strategy again. For now, the dust is still settling for the August increases and it remains to be seen where the new spot prices will settle in at.

The new asking prices for the most commonly produced HDG product, 0.019” x 48” G90 (0.48 mm x 1.219 m) start at $35.50 cwt. ($783 /mt or $710 /nt) ex-Midwest mills, while the lighter gauge, niche item, 0.012” 40.875” G30 (0.30 mm x 1.04 m) is offered at a range of $38.00 cwt. to $40.00 cwt. ($838 /mt to $882 /mt or $760 /nt to $800 /nt) ex-mill in the Midwest. But again, there are no major orders being placed at these new numbers yet. The rush of orders that mills received for July were booked at $2.00 cwt. to $4.50 cwt. below these levels.

As for Galvalume products, however, the market appears to be tighter than that for other HDG products, as it is more of a niche item and there is less production of this material. Most mills offering Galvalume are reportedly booked out through August, and are offering 0.019" x 41.5625" Gr80/AZ55 (0.48 mm x 1.219 m) at a minimum of $36.00 cwt. ($794 /mt or $720 /nt) ex-mill, with some spot offers as high as $40.00 cwt. ex-mill.

Meanwhile, offshore HDG sources have retreated even further from the market, with some raising prices and many exiting from the market altogether. Foreign mills, particularly in India, China and South America, are getting better prices in other markets, and are booking for September/October delivery, which does not appeal to US customers right now.

On the 0.019” G90 side, offers for the US from Chinese mills remain at a level of $36.00 cwt. to $38.00 cwt. ($794 /mt to $838 /mt or $720 /nt to $760 /nt), duty-paid, loaded truck, in US Gulf Coast ports while South Korean offers range from $37.00 cwt. to $38.00 cwt ($816 /mt to $838 /mt or $740 /nt to $760 /nt) duty-paid, loaded truck, in US West Coast ports.

For 0.012” G30, India is offering at a range of $35.00 cwt. to $37.00 cwt. ($772 /mt to $816 /mt or $700 /nt to $740 /nt) duty-paid, loaded truck, in US Gulf Coast ports, while Korea is offering at $39.00 cwt. to $41.00 cwt. ($860 /mt to $904 /mt or $780 /nt to $820 /nt) duty-paid, loaded truck, in US West Coast ports.

Offers of 0.019 AZ55 Galvalume products from Korea are offered at a range of $37.00 cwt. to $38.00 cwt. duty-paid, loaded truck, in US West Coast ports.