As US flat rolled mills struggle to fill their December order books, discounts have become more pervasive in the market and spot prices on hot-dipped galvanized (HDG) coil products have weakened since last week.
Domestic HDG offers have come down by at least $1.00 cwt. ($22/mt or $20/nt) since last week, and sometimes more, depending on product specifications. US HDG base prices from Midwest mills now range from approximately $31.00 cwt. to $33.00 cwt. ($683/mt to $728/mt or $620/nt to $660/nt), while offers of 0.019" x 48" G90 (0.48 mm x 1.219 m) now range from $42.00 cwt. to $44.00 cwt. ($926/mt to $970/mt or $840/nt to $880/nt) ex-mill. Offers of 0.012" x 40.875" G30 (0.30 mm x 1.04 m) now range from $44.00 cwt. to $46.00 cwt. ($970/mt to $1,014/mt or $880/nt to $920/nt) ex-mill, but with new deals cropping up almost daily, some buyers have been quoted prices as low as $42.00 cwt. The range of offer prices for any given product is widening, since, as one buyer put it, domestic HDG prices are "all over the map."
The overall price trend for domestic HDG coils remains down, due largely to typical fourth quarter seasonal factors, not to mention the soft economy, tight credit environment and lean-inventory mentality of most buyers. There is very little hedge buying taking place since most buyers are not in need of steel currently, see that prices are falling, and would rather wait until they absolutely have to buy, or prices start to rebound again. However, no official spot price decrease from domestic flat rolled mills is expected. Mills' lead times are shortening, though they are still late on deliveries and will try to keep the market as tight as possible. That said, mills will continue to cut deals until they are booked out for the year.
On the import side, HDG offer lead times are into January and February, and traders say they have started to book some orders on typical niche items, but nothing of any volume. With the Chinese market bottoming within the past couple weeks and other Asian markets expected to soon follow suit, offshore sources are quickly losing interest in the US market, where prices are still deteriorating.
Import offers on most HDG products have remained stable within the past week. India remains the most prevalent source for light gauge HDG, but mills are not aggressively pushing for tonnage. Meanwhile, Taiwan is becoming a bit more aggressive in the market and may soon emerge as the most competitive offshore source for some HDG products especially as Chinese offers have stopped dropping. Again, there is very little import material being booked currently, though traders expect to start seeing some interest for February/March deliveries.
For 0.019" x 48" G90 (0.48 mm x 1.219 m), most Chinese offers range from $40.00 cwt. to $41.00 cwt. ($882/mt to $904/mt or $800/nt to $820/nt); Taiwanese offers are at $41.00 cwt. to $42.50 cwt. ($904/mt to $937/mt or $820/nt to $850/nt); Indian offers are at $41.50 cwt. to $42.50 cwt. ($915/mt to $937/mt or $830/nt to $850/nt); and Korean offers range from $44.00 cwt. to $45.00 cwt. ($970/mt to $992/mt or $880/nt to $900/nt). All offers are duty-paid, FOB loaded truck in US Gulf ports.
For the lighter gauge HDG item, 0.012" x 40.875" G30 (0.30 mm x 1.04 m), Chinese offers range from $39.00 cwt. to $40.00 cwt. ($860/mt to $882/mt or $780/nt to $800/nt); Mexican offers range from $40.00 cwt. to $42.00 cwt. ($882/mt to $926/mt or $800/nt to $840/nt); Indian offers range from $40.50 cwt. to $41.50 cwt. ($893/mt to $915/mt or $810/nt to $830/nt); Taiwanese offers range from $43.00 cwt. to $44.00 cwt.; and Korean offers range from $47.00 cwt. to $48.00 cwt. ($1,036/mt to $1,058/mt or $940/nt to $960/nt). All offers are duty-paid, FOB loaded truck in US Gulf ports, except for the Mexican offers, which are delivered to the border crossing.