US domestic hot dip galvanized (HDG) coil spot prices have slipped since last week as mills have begun to offer discounts to try to fill the holes in their fourth quarter order books.
Domestic HDG prices have slid by about $1.00 cwt. to $2.00 cwt. ($22/mt to $44/mt or $20/nt to $40/nt) across the board since last week, with HDG base prices from most mills now ranging from $32.00 cwt. to $34.00 cwt. ($705/mt to $750/mt or $640/nt to $680/nt). Domestic spot offers for 0.019" x 48" G90 (0.48 mm x 1.219 m) now range from $43.00 cwt. to $45.00 cwt. ($948/mt to $992/mt or $860/nt to $900/nt) ex-Midwest mills, which is down $1.00 cwt. since last week. Offers for 0.012" x 40.875" G30 (0.30 mm x 1.04 m) now range from approximately $46.00 cwt. to $48.00 cwt. ($1,014/mt to $1,058/mt or $920/nt to $960/nt) ex-mill, Midwest, down $2.00 cwt. since last week. Domestic offers of Galvalume 0.019" x 41.5625" Gr.80/AZ55 range from $43.00 cwt. to $45.00 cwt. ex-mill, Midwest, also down $2.00 cwt. within the last week.
With US HDG demand only expected to get weaker as the fourth quarter progresses and US busheling scrap prices expected to slide further in November, the pricing trend for US HDG remains down. SteelOrbis expects that domestic HDG spot prices will probably drop by another $20/nt to $40/nt across the board before finally bottoming out in December. However, it is unlikely that prices and demand in the US flat rolled market will start to trend up again until towards the end of the first quarter of 2010.
Import HDG offers for the US have not decreased further since last week, although the pricing trend for these offers also remains down. It is thought that Chinese offers are close to bottoming, but offers from other Asian sources may have a little further to fall. Still, the domestic market is encouraged by the fact that Chinese offers did not fall as precipitously as initially feared, and that import bookings remain sparse despite the appearance in recent weeks of some competitive offers. At the same time, US producers are now generally willing to price match import offers as both demand and offshore offers have weakened within the past month. This will likely continue until US mills start to see an up-tick in demand.
Since last week, Chinese offers of 0.019" G90 have remained at a range of $39.00 cwt. to $40.00 cwt. ($860/mt to $882/mt or $780/nt to $800/nt) duty-paid, FOB loaded truck in US Gulf ports, while Chinese offers of 0.012" G30 are also stable from last week and range from approximately $40.00 cwt. to $41.00 cwt. ($882/mt to $904/mt or $800/nt to $820/nt) FOB loaded truck in US Gulf ports. Traders are currently waiting on new HDG offers from China for December production.
Indian HDG offers for the US are also unchanged since last week. Offers of 0.019" G90 continue to range from $41.50 cwt. to $42.50 cwt. ($915/mt to $937/mt or $830/nt to $850/tn) duty-paid, FOB loaded truck in US Gulf ports, and most 0.012" G30 offers still range from $42.50 cwt. to $43.50 cwt. ($937/mt to $959/mt or $850/nt to $870/nt) duty-paid, FOB loaded truck in US Gulf ports.
There are also some import HDG offers from Taiwan and Korea, but they are priced significantly higher than the Chinese or Indian offers. Taiwanese and Korean offers of 0.019" G90 and 0.012" G30 are, on a duty-paid, FOB loaded truck US Gulf port basis, currently at around the US domestic spot price whereas Chinese and Indian remain several dollars per hundredweight more competitive than US domestic offers.
On the Galvalume end, offerings for the US of 0.019" AZ55 from India and China still range from $44.00 cwt. to $45.00 cwt. ($970/mt to $992/mt or $880/nt to $900/nt) duty-paid, FOB loaded truck in US Gulf ports.