US HDG market preparing for inevitable price decrease

Domestic hot dip galvanized (HDG) spot prices have decreased further since SteelOrbis’ last report one week ago, and buyers say an even larger decrease could be on its way when domestic mills open their October order books.

As the flat rolled buying activity continues to slow, spot prices are drifting further away from mills’ official list price; however, that won’t be the case for long, as mills are expected to lower their list prices by a large sum. At press time, the major US flat rolled mills have yet to open their October order books and announce new pricing levels. However, with busheling scrap prices down as much as $200 /lt and demand at a weak point, mills are planning for a decent sized decrease. Most buyers suspect that the decrease will not be as significant as the busheling scrap drop, but it will be substantial nevertheless.  Spot prices are already lower than the list prices and a big decrease may bring the list prices to more realistic levels. 

Nucor is expected to announce their new pricing levels as early as Thursday evening and the other major US flat rolled mills are expected to follow with new pricing announcements shortly thereafter. 

Current spot base prices for HDG coils are approximately $53.00 cwt. to $55.00 cwt. ($1,168 /mt to $1,213 /mt or $1,060 /nt to $1,100 /nt), down $2.00 cwt. ($44 /mt or $40 /nt) since last week. Domestic HDG 0.019" x 48" G90 coils are now ranging from $62.00 cwt. to $64.00 cwt. ($1,367 /mt to $1,411 /mt or $1,240 /nt to $1,280 /nt) ex-mill Midwest, though mills are willing to make deals for customers wanting major tonnage.

At this point, especially for HDG, as it is the weakest of the flat rolled products, mills are ready and willing to make deals with customers and business is done on a bid basis to achieve the lowest price. If the buyer puts a solid bid in front of the steelmakers, all reasonable offers are considered.

The import side of the market is experiencing a similar business pattern. Offshore mills as well are willing to make deals and have customers name their price, within reason. Foreign mills have also been slashing prices and the prices are expected to fall even further.

Offers from China for HDG 0.019" x 48" G90 have decreased by $2.00 cwt. ($44 /mt or $40 /nt) in the last week. Chinese offers are ranging from $61.00 cwt. to $63.00 cwt. ($1,245 /mt to $1,389 /mt or $1,220 /nt to $1,260 /nt) FOB loaded truck West Coast ports.

Chinese offerings for HDG sized 0.028" x 48" G40 have also decreased by $2.00 cwt. since last week and now range from $56.00 cwt. to $58.00 cwt. ($1,235 /mt to $1,279 /mt or $1,120 /nt to $1,160 /nt) FOB loaded truck West Coast ports.

Offers from India for 0.012" by 40.875" G30 have decreased by $1.00 cwt. ($22 /mt or $20 /nt) since our last report. Offerings are now in the range of $62.00 cwt. to $64.00 cwt. ($1,367 /mt to $1,411 /mt or $1,240 /nt to $1,280 /nt) FOB loaded truck Gulf ports.

For the same size and coating, Chinese offerings are priced at $60.00 cwt. to $62.00 cwt. ($1,323 /mt to $1,367 /mt or $1,200 /nt to $1,240 /nt) FOB loaded truck West Coast ports, representing a decrease of $2.00 cwt. in the last week. 

Some Mexican offers have also surfaced with prices similar to domestic numbers. Offers from Mexico to the border are ranging from $63.00 cwt. to $65.00 cwt. ($1,389 /mt to $1,433 /mt or $1,260 /nt to $1,300 /nt) for October deliveries. All other offers mentioned above are for December/January deliveries.   

On the galvalume side of the market, for 0.019" by 48" AZ55 items, domestics have decreased by about $1.00 cwt. and are now ranging from $65.00 cwt. to $67.00 cwt. ($1,433 /mt to $1,477 /mt or $1,300 /nt to $1,340 /nt) FOB mill. As for imports, the offers that are available are right around the domestic number, though for much later arrivals. Taiwanese offerings are at approximately $65.00 cwt. to $67.00 cwt. ($1,433 /mt to $1,477 /mt or $1,300 /nt to $1,340 /nt ) FOB loaded truck West Coast ports, representing a decrease of $2.00 cwt. since last week. Indian offers are priced at $66.00 cwt. to $68.00 cwt. ($1,455 /mt to $1,499 /mt or $1,320 /nt to $1,360 /nt) FOB loaded truck Gulf ports, also down $2.00 cwt. since last week. Offerings from China have also surfaced at the same levels as Taiwanese offerings.