Since SteelOrbis' hot dip galvanized (HDG) report last week, US domestic prices have remained stable as no new announcements have occurred in the last seven days. However, buyers say that the current prices will not be around for long since major mills are expected to raise prices again for June orders.
Flat rolled producers have been upping prices on a regular basis in an effort to recover higher steelmaking costs. After all of the major US domestic mills made price increase announcements for May shipments, AK Steel announced last week that, effective immediately, it would raise its flat rolled offers by another $50 /nt ($2.50 cwt. or $55 /mt). The major US mills have yet to announce prices for June, although all buyers are in agreement that prices are going in no other direction but up. Especially with AK Steel being ahead of its flat rolled competitors by $50 /nt, buyers say June prices will be increasing by at least $50 /nt, if not more.
For most flat rolled mills, their May order books are still open and HDG material is available. Current domestic spot offers for HDG 0.019" by 48" G90 items are still ranging from $58.00 cwt. to $60.00 cwt. ($1,279 /mt to $1,323 /mt or $1,160 /nt to $1,200 /nt) FOB Midwest mills. West Coast delivery is an additional $3.00 cwt. ($66 /mt or $60 /nt), which is reflected in the prices of West Coast galvanized producers as well.
Domestic prices are not heading down anytime soon. Demand isn't very strong, but supply issues have been a major factor for several months now. Imports are becoming less and less available, and the prices are becoming more unattractive, causing buyers to rely solely on domestic mills for their material. Low inventories have been reported, and high raw material costs are inevitable, leaving buyers no choice but to pay these high prices for their material.
Import offers, which were already on the high side, are expected to move up even further. SteelOrbis has heard that India's government, as a measure to control inflation and increase domestic supplies, has suspended its five percent export rebate for galvanized steel products. There have even been reports, though still unconfirmed, that Indian mills are to stop steel exports all together. Although most believe that India will still continue to export, there is no doubt that their prices will get pushed up.
Last week, offers from India for 0.012" by 40.875" G30 were 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 on the Gulf Coast. Now, although no new offers have been formally announced, the indication is that offers are in the range of $62.50 cwt. to $64.50 cwt. ($1,378 /mt to $1,422 /mt or $1,250 /nt to $1,290 / nt) and are just expected to increase further. Comparatively, domestic FOB mill prices for this size are still pricing at approximately $62.00 cwt. to $62.25 cwt. ($1,367 /mt to $1,372 /mt or $1,240 /nt to $1,245 /nt).
There are still no Chinese offers in the market, though buyers are still anticipating some new offers to come shortly at much higher levels than their previous offerings.
On the galvalume side of the market, for 0.019" by 48" AZ55 items, domestic prices have remained stable in the last week and continue to range from $59.00 cwt. to $61.00 cwt. ($1,301 /mt to $1,345 /mt or $1,180 /nt to $1,220 /nt) FOB mill. As for imports, there are no new Indian offers this week, although some Taiwanese offers have surfaced and are in the range of $64.00 cwt. to $66.00 cwt. ($1,411 /mt to $1,455 /mt or $1,280 /nt to $1,320 /nt) for late August deliveries. South Korean offers are said to be at least $100 /nt ($5.00 cwt. or $110 /mt) higher.