US hot dipped galvanized (HDG) coil prices are still moving up along with the rest of the US flat rolled market, although there are questions as to just how much further mills can raise offers before running out of steam.
Since last week, most domestic HDG offers have firmed up in line with producers' March spot price hikes. Most HDG base prices now range from $36.00 cwt. to $37.00 cwt. ($794/mt to $816/mt or $720/nt to $740/nt) ex-Midwest mills, while offers of 0.019" x 48" G90 (0.48 mm x 1.219 m) now range from $47.00 cwt. to $48.00 cwt. ($1,036/mt to $1,058/mt or $940/nt to $960/nt) ex-Midwest mills. Both are up $1.00 cwt. ($22/mt or $20/nt) since last week. Domestic offers of 0.012" x 40.875" G30 (0.30 mm x 1.04 m) continue to range from approximately $49.00 cwt. to $51.00 cwt. ($1,080/mt to $1,124/mt or $980/nt to $1,020/nt) ex-Midwest mills.
Domestic Galvalume offers have also moved up by about $1.00 cwt. since last week, with most base prices now ranging from $36.00 cwt. to $37.00 cwt. and 0.019" x 41.5625" Gr80/AZ55 now ranging from $47.00 cwt. to $48.00 cwt. ex-Midwest mills.
In general, US HDG prices are still trending slightly up and raw steel production continues to inch up on a weekly basis. Demand from both automotive and from inventory restocking seems to be decent even though metal building activity remains weak. More capacities are coming back online as mills look to take advantage of the higher pricing -- Severstal announced this week that it would restart some of its idled North American facilities, including the blast furnace, steelmaking and hot strip mill facilities at Severstal Warren, by late first quarter, and its Severstal Wheeling coating lines, which will return to service in late 2010.
There is a good amount of skepticism among buyers as to whether demand will be strong enough to support the production increases and price hikes beyond the first quarter, or whether prices will start to decline again once inventory restocking completes and/or scrap prices start to trend down again. For now, there is still some speculation that mills will go for another price increase next month, although unless scrap prices show some upward movement, it will be difficult for such an increase to gain much support.
Despite the lack of strong end-use demand and uncertain raw materials outlook, US flat rolled producers are still benefiting from the lack of import competition. Imports still pose little threat to US HDG producers as offshore mills are content to sit on the sidelines and not be an active participant in the US market. Most offers are not competitively priced and no one wants to take a gamble and buy import right now if they think there' s a chance that prices will start to drop again in the next 60 to 90 days.
Current import indications for 0.019" G90 are from both Taiwan are at about $47.00 cwt. ($1,036/mt or $940/nt) and above, while, indications for offers of the same product from India range from about $48.00 cwt. to $50.00 cwt. ($1,058/mt to $1,102/mt or $960/nt to $1,000/nt) Both are duty-paid, FOB loaded truck in US Gulf ports.
Indications for 0.012" G30 from India are at about $48.00 cwt. to $50.00 cwt., while Taiwanese offers of the same product are currently at about $47.50 cwt. ($1,047/mt or $950/nt), both duty-paid, FOB loaded truck in US Gulf ports. Taiwanese Galvalume offers are also at $47.50 cwt. and higher, while Mexico is also offering some Galvalume to the US at a range of $47.00 cwt. to $49.00 cwt. ($1,036/mt to $1,080/mt or $940/nt to $980/nt) delivered to US border states.