The short-term outlook for US domestic hot dipped galvanized (HDG) prices has steadied, but the outlook for Q3 is more uncertain.
As predicted last week, after falling throughout April and May, US domestic spot prices have now settled in the range of $43.00-$44.00 cwt. ($948-$970/mt or $860-$880/nt) ex-Midwest mill for HDG and Galvalume base-unchanged from a week ago. Spot prices on coating extras have trended sideways in the last week as well. Little movement is expected over the next few weeks as demand levels remain stagnant, and domestic mill capacity utilization rates continue to hover around 74 percent.
Although spot prices are poised to stay neutral through the end of this month, the outlook past Q2 is still cloudy. The direction of HDG spot prices past June will depend on whether the bump in activity that was created after late-May mill price increase announcements continues into July and August, when the typical summer slowdown is really felt. What the US HDG market doesn't have to worry about-at least at the moment-is competition from offshore sources. US interest in booking futures is minimal, as most import offers to the US are stagnant, with offer prices too close to US domestic levels.
| Cwt. | Metric Ton (mt) | Net ton (nt) | Change from last week | |
| US domestic HDG base price | $43-$44 | $948-$970 | $860-$880 | neutral |
| 0.012"x40.875" G30 | ||||
| ex-Midwest mill | $52-$54 | $1,146-$1,190 | $1,040-$1,080 | neutral |
| 0.019"x48" G90 | ||||
| ex-Midwest mill | $54-$55 | $1,190-$1,213 | $1,080-$1,100 | neutral |
| Galvalume | ||||
| ex-Midwest mill | $43-$44 | $948-$970 | $860-$880 | neutral |
| 0.019x41.5625 Gr80/AZ55 | ||||
| ex-Midwest mill | $54-$55 | $1,190-$1,213 | $1,080-$1,100 | neutral |
Domestic Chinese HDG prices continue to fluctuate on low demand levels, but traders tell SteelOrbis that with the drought that China has been experiencing in the last few months, some steel mills are feeling the pinch of reduced electricity supply. And if the electricity shortage continues, not only will Chinese prices rise, but offers for export may become limited as well.
On the other hand, arriving HDG imports from China are already beginning to show up at US ports in heavy numbers. According to data from the US Steel Import Monitoring and Analysis System (SIMA), just as of June 9, 16,213 mt (license data) of HDG sheet and strip from China has already arrived into the US, compared to 24,109 mt (license data) that arrived in all of May. So far, a total 46,410 mt of HDG sheet and strip has arrived into the US in June, already close to half of the 111,795 mt that arrived last month.
| Import HDG offers to the US | Cwt. | Metric ton (mt) | Net ton (nt) | Change from last week |
| 0.012"x40.875" G30 | ||||
| India* | $50-$51 | $1,102-$1,124 | $1,000-$1,020 | neutral |
| China* | $49-$50 | $1,080-$1,102 | $980-$1,000 | neutral |
| Mexico* | $51-$53 | $1,124-$1,168 | $1,020-$1,060 | neutral |
| 0.019" x 48" G90 | ||||
| China* | $49.50-$50.50 | $1,091-$1,113 | $990-$1,010 | neutral |
| India* | $51-$53 | $1,124-$1,168 | $1,020-$1,060 | neutral |
| Galvalume | ||||
| 0.019x41.5625 Gr80/AZ55 | ||||
| Taiwan* | $52-$53 | $1,146-$1,168 | $1,040-$1,060 | neutral |
| Mexico** | $52-$53 | $1,146-$1,168 | $1,040-$1,060 | neutral |
| China* | $52-$53 | $1,146-$1,168 | $1,040-$1,060 | neutral |
**DDP loaded truck delivered into Houston