US HDG market has all eyes on Section 232 tariff exemption announcement

Monday, 30 April 2018 01:14:15 (GMT+3)   |   San Diego
       

It’s been a long few weeks for buyers and sellers of US domestic flat rolled steel; although prices have seemingly leveled in the past two weeks, the wildcard continues to be the Trump administration’s decision regarding the Section 232 tariff exemption.

Although the original deadline to decide whether the exemptions for certain countries would continue was scheduled for May 1, late-breaking news on Monday night indicates that the decision will be delayed until June 1.

“Today was anticlimactic," a source said. "[Trump] has once again kicked the can down the road and because of that, the market-wide uncertainty is going to continue for another month."

Another source agrees.

"We're all still waiting to see what’s going to transpire because whatever that decision is, it’s going to have an impact on domestic pricing,” a source said. “We’re all just sitting here in a holding pattern.”

What is known, sources say, is that US domestic scrap prices are expected to drop slightly next month, which could make it difficult for domestic steel producers to try to push spot market prices upward in the immediate future.

On the other hand, if the Trump administration decides to implement widespread import quotas instead of tariffs before June 1, “the domestics may have somewhat of an upper hand.”

Current pricing for US HDG coil is listed in the chart below.

  Cwt. Metric Ton (mt) Net ton (nt) Change from last week
US domestic HDG base price $50-$52 $1102-$1146 $1000-$1040 neutral
         
US domestic Galvalume base price        
ex-Midwest mill $50-$52 $1102-$1146 $1000-$1040 neutral
         
0.019x41.5625 Gr80/AZ55        
ex-Midwest mill $60-$62 $1323-$1367 $1200-$1240 neutral

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