US HDG market still going strong, though outlook for end-Q4 uncertain

US domestic hot dip galvanized (HDG) spot prices have tightened up by about $0.50 cwt. ($11/mt or $10/nt) since last week, as lower-priced offers have started to disappear from the market.

As mills' October price hikes have settled in, the majority US Midwest mills are offering HDG and Galvalume base prices at a range of $33.00 cwt. to $34.00 cwt. ($728 /mt to $750 /mt or $660 /nt to $680 /nt). Coating extras have become somewhat blurred, as some mills have announced new extras and others have not. However, it is safe to say that the majority of domestic 0.019” x 48” G90 (0.48 mm x 1.219 m) offers fall in a range of $43.00 cwt. to $44.00 cwt. ($948 /mt to $970 /mt or $860 /nt to $880 /nt) ex-Midwest mills, while  0.012” x 40.875” G30 (0.30 mm x 1.04 m) offers are mostly found between $45.00 cwt. to $46.00 cwt. ($992 /mt to $1,014 /mt or $900 /nt to $920 /nt) ex-mill.

Propelled by increased US automotive production in recent months, coated products are still the hottest market among the US flat rolled product markets and most mills are well-sold for October. The HDG market is expected to easily maintain its momentum through October, though there is some concern as to whether there will be enough demand in the holiday months of November and December to absorb the additional production that is entering the market. Several mills have recently restarted idled galvanizing lines, and total US crude steel production figures have risen in every week of the last two months.

For now, demand appears strong enough to maintain the up-trend for US HDG pricing for the near-term, but concerns about the sustainability of the recent demand up-tick along with worries about increasing production loom large in the minds of many market players.

On the import side, despite some reported softening in China's domestic flat rolled market, there has been no decrease in offshore offering prices to the US. In fact, prices continue to rise, with Taiwan re-entering the market within the past week with higher than expected offers. China and India are still not offering competitively and mills still report they have next to no availability for export to the US. There are some offers for HDG imports from these and other offshore sources, but they are still far too high-priced for the US market, with the only viable offshore offers being for niche (wide or narrow coils, light gauge) items. There is some concern, however, about a possible deepening of the slowdown in Chinese activity, but again, weaker prices have yet to be observed by US traders. It will become more apparent within the coming weeks whether China is becoming more eager to ship to the US. But for now, US import activity for HDG/coated products remains at a trickle, and prices are still generally trending up.
 
The latest HDG offers from India for 0.019” x 48” G90 (0.48 mm x 1.219 m) calculate to approximately $42.50 cwt. to $45.00 cwt. ($937 /mt to $992 /mt or $850 /nt to $900 /nt) duty-paid, FOB loaded truck in US Gulf ports, while India's offers for 0.012” x 40.875” G30 (0.30 mm x 1.04 m) range from $43.50 cwt. to $46.00 cwt. ($959 /mt to $1,014 /mt or $870 /nt to $920 /nt) duty-paid, FOB loaded truck in US Gulf ports.

Chinese offers for 0.012” G30 calculate to a minimum of $43.00 cwt. ($948 /mt or $860 /nt) duty-paid, FOB loaded truck in US Gulf ports.

Taiwanese 0.019” x 48” G90 offers for the US range from $42.50 cwt. to $43.50 cwt. ($937 /mt to $959 /mt or $850 /nt to $870 /nt) duty-paid, FOB loaded truck in the Gulf, while offers from Taiwan of 0.012” x 40.875" G30 range from $46.00 cwt. to $47.00 cwt. ($1,014 /mt to $1,036 /mt or $920 /nt to $940 /nt) in the Gulf.

The only offshore Galvalume offers heard are from Taiwan, with offers of 0.019” AZ55 ranging from $44.50 cwt. to $45.50 cwt. ($981 /mt to $1,003 /mt or $890 /nt to $910 /nt) in the Gulf.