Import hot dip galvanized (HDG) offers have retreated further from the US market in the past week, with some sources raising their prices, and others exiting the market completely.
The US flat rolled market has been dominated by domestic producers for many weeks, which is especially notable for the HDG end of the market, as import sources like India have traditionally been more aggressive than the US mills, particularly for light gauge products. This is in stark contrast to the current market conditions, as Indian mills have withdrawn their HDG offers for the US and traders say they do not plan to return until US demand improves. It is now the case that virtually all coated products, even light gauge and niche items, can be procured from domestic producers at better prices than import sources are offering.
While India has exited the US HDG market for the time being, Taiwan, and another typically competitive HDG import source, Korea, have both raised their HDG offers for the US in the last week, widening the gap between US domestic and import offers. Foreign flat rolled suppliers seem to have very little interest in the US market at present, as they can command better prices from other regions, and would rather retreat from the US market than lower their prices to match US expectations.
Furthermore, availability of ships from certain regions, particularly India, remains an issue, and American mills can offer much quicker lead times than imports, which is very important to customers in the soft US market.
There is also the expectation that an antidumping case will be filed on coated product imports from several countries, which is making traders wary of booking from these sources. Countries rumored to be under consideration for inclusion in the filing include China, Taiwan, India, and possibly Mexico.
Offers for Taiwanese HDG material have risen by as much as $3.00 cwt. ($66 /mt or $60 /nt) since last week. Most 0.019” x 48” G90 (0.48 mm x 1.219 m) offers from Taiwan now range from $35.00 cwt. to $37.00 cwt. ($772 /mt to $816 /mt or $700 /nt to $740 /nt) duty-paid, loaded truck in US West Coast ports, while Taiwanese 0.012” x 40.875” G30 (0.30 mm x 1.04 m) offers are now at a range of $37.00 cwt. to $38.00 cwt. ($816 /mt to $838 /mt or $740 /nt to $760 /nt) duty-paid, loaded truck, in US West Coast ports.
Korean HDG offers have also risen by as much as $3.00 cwt. since last week, with offers of both 0.019” G90 and 0.012” G30 now ranging from $34.00 cwt. to $36.00 cwt. ($750 /mt to $794 /mt or $680 /nt to $720 /nt) duty-paid, loaded truck, in US West Coast ports.
China is still offering at the same range as last week, with 0.019” G90 offers ranging from $32.00 cwt. to $34.00 cwt. ($705 /mt to $750 /mt or $640 /nt to $680 /nt) in the Gulf, and 0.012” offers ranging from $34.00 cwt. to $36.00 cwt. in the Gulf
Mexico is now the most competitive import source for 0.012” G30, continuing to offer at a range of $33.00 cwt. to $35.00 cwt. ($728 /mt to $772 /mt or $660 /nt to $700 /nt) at the US border crossing. Still, there are not an abundance of offers.
On the Galvalume end, Taiwanese offers of 0.019" x 41.5625" Gr80/AZ55 (0.48 mm x 1.219 m) have risen by about $1.00 cwt. ($22 /mt or $20 /nt) since last week, with most offers now ranging from $35.00 cwt. to $37.00 cwt. on the West Coast, while Korean offers are still found at the same range as last week, of $33.00 cwt. to $35.00 cwt. on the West Coast. Mexican Galvalume offers are found at a range of $33.00 cwt. to $35.00 cwt. at the US border crossing.
Meanwhile, US flat rolled mills are still quoting for June shipment, though they may attempt to firm up prices, probably in sync with scrap, once they are full for the month. US automotive-grade scrap prices will likely continue trending slightly up this summer as more auto production is idled, and this should provide the flat rolled market some strength.
On the demand side, indications are that flat rolled consumption is not getting worse, but it isn't improving. The average customer is not afraid to buy what he or she needs, but on the same token, most customers aren't confident that prices or business conditions will improve anytime soon and are therefore in no hurry to build inventory again. Still, the low inventories will eventually catch up to the market once demand conditions start to improve. With next to no imports coming into the country, domestic mills are gaining more and more price control, which will probably result in some price firming by the end of the third quarter, going into the fourth quarter.
Domestic HDG base prices have not moved from last week and continue to range from $22.00 cwt. to $24.00 cwt. ($485 /mt to $529 /mt or $440 /nt to $480 /nt), while both 0.019” G90 and 0.012” G30 offers still range from $30.00 cwt. to $32.00 cwt. ($661 /mt to $705 /mt or $600 /nt to $640 /nt) ex-Midwest mills.
Domestic Galvalume base prices are found at a range of $23.00 cwt. to $25.00 cwt. ($507 /mt to $551 /mt or $460 /nt to $500 /nt), with 0.019” AZ55 still ranging from $32.00 cwt. to $34.00 cwt. ex-Midwest mills.