Following in the steps of their hot rolled coil (HRC) and cold rolled coil (CRC) counterparts, US domestic hot dipped galvanized (HDG) transaction pricing has remained neutral since our last report a week ago, as buyers and service centers continue to evaluate as to what level inventories can be effectively trimmed.
Interesting to note is that data reported in the most recent Metals Service Center Institute (MSCI) report indicates that while steel shipments for flat rolled products during the month of June reflect a month-on-month increase from May (2,055 nt versus 1,857.2 nt), it also indicated that inventories have actually increased by about 8 percent, reemphasizing the magnitude of overproduction.
Additionally, it's also important to point out that the most recent report by the US Census Bureau and the Department of Housing and Urban Development; privately-owned housing starts in June were 5 percent below forecasted estimates, while single-family housing starts reflected a 0.7 shortfall of expectations.
All in all, end-use demand for coated products is still relatively flaccid, and as long as production is mismatched to order levels, continued softening in transaction pricing will remain the trend.
Cwt. Metric Ton (mt) Net ton (nt) Change from last week US domestic HDG base price $34 - $36 $750 - $794 $680-$720 neutral 0.012"x40.875" G30 ex-Midwest mill $45 - $47 $992 - $1,036 $900-$940 neutral 0.019"x48" G90 ex-Midwest mill $44 - $45 $970 - $992 $880-$900 neutral Galvalume ex-Midwest mill $34 - $35 $750 - $772 $680-$700 neutral 0.019x41.5625 Gr80/AZ55 ex-Midwest mill $46 - $48 $1,014 - $1,058 $920-$960 neutral
Looking offshore, India has implemented a temporary time-out in terms of offerings, having recently announced that August orders are now closed. However, they have indicated that September pricing will be available in the near future. More interestingly, though, is the recent aggressiveness of Chinese sellers, who have, according to industry sources, started pressuring traders to "either buy now at this price or buy next week when we raise it". Although it's unsure if this is more of a sales tactic as opposed to a statement of fact, buyers aren't really biting.
Import HDG offers to the US Cwt. Metric ton (mt) Net ton (nt) Change from last week 0.012"x40.875" G30 India --- --- --- August orders closed China $44-$46 $970-$1,014 $880-$920 neutral 0.019"x48" G90 India --- --- --- August orders closed China $43-$45 $948 -$1,014 $860-$920 ↓$1.00 cwt. on low end Galvalume 0.019x41.5625 Gr80/AZ55 China --- --- --- August orders closed Taiwan $43 - $44 $948 - $970 $860-$880 neutral Korea bid-basis -- -- --