US HDG prices creep upward in advance of Section 232 results

Spot market prices for US domestic hot dipped galvanized (HDG) and Galvalume coil have inched up since our last report a week ago.  The price firming comes after an early June price increase announcement by US domestic flat rolled steel mills.

Current prices for base-price US domestic HDG coil has firmed by $1.00 cwt. ($22/mt or $20/nt) on the bottom end since our last report a week ago, which brings the current average transaction range to $39-$40 cwt. ($860-$882/mt or $780-$800/nt), ex-mill.

The still-pending findings in the Section 232 investigation, which are expected to be released in a matter of days, continues to be the wildcard when it comes to where US HDG spot market prices will land.

On one hand, the investigation has drawn mounting support from US domestic steel mills, who say that unfairly priced imports are harming the market. On the other hand, European members of NATO are indicating they may retaliate should the US crack down hard on steel imports. 

News outlets have reported that should this happen, some NATO members are considering filing a complaint with the World Trade Organization.

Other sources have indicated that Mexico and Canada are still trying to lobby to be excluded from any such tariffs.

US market players believe that if the Section 232 outcomes implement hefty financial penalties against countries who are wanting to sell import steel in the US domestic market, that flats mills “are ready and waiting to put out wide-sweeping price hikes, which could be rolled out within hours of the Commerce Department’s announcement.”