US HDG spot market prices fall sharply

Monday, 03 June 2019 23:10:49 (GMT+3)   |   San Diego

Last week, the US HDG spot market got off to a slow start, but when market players returned to the office after the Memorial Day holiday, prices fell quickly.

The most commonly heard spot market prices for US domestic HDG and Galvalume have fallen by $2.50 cwt. ($55/mt or $50/nt) since our last report a week ago. The downtrend in HDG prices closely mirrors what’s been happening in both the US HRC and CRC markets. Current US HDG spot market prices are down sharply from their peak in late July 2018, when the average transaction price was recorded at $50.50 cwt. ($1,113/mt or $1,010/nt), ex-mill.

Import tonnages are down sharply year-over-year, from 317,666 mt in April 2018 (census data), to 215,577 mt in April 2019 (preliminary census data) but the sharp ramp-up in US capacity rates continues to put the domestic market in a place where supply is outpacing demand.

“If you look at the numbers, in total, steel imports are down about a million tons a month from where we were last year,” a source said. “In theory that’s good, but with the domestic mills having ramped up capacity to where it’s at, they’re producing more steel than what was taken out of the market. The problem is that I don’t think any of the mills will be rushing to cut production because they’re afraid of losing market share.”

The one bright spot in the market, a source noted, is the expectation that US scrap prices will trade at sideways during the June buy cycle.

Current US HDG spot market prices are listed in the chart below.

Product $/cwt $/mt $/nt Delivery Weekly change
US domestic HDG base price $36.50-$38.50 $805-$849 $730-$770 ex-mill down $2.50
US domestic Galvalume base price $36.50-$38.50 $805-$849 $730-$770 ex-mill down $2.50
0.019x41.5625 Gr80/AZ55 $46.50-$48.50 $1,025-$1,069 $930-$970 ex-mill down $2.50

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