US import HDG prices could soon drop

After months of little-to-no change in import offer prices to the US, offshore mills are beginning to express willingness to negotiate prices lower. No significant decreases have been announced just yet, but trader sources tell SteelOrbis that hot dipped galvanized (HDG) and Galvalume offer prices from Taiwan and China in particularly are slowly sliding and could fall sooner rather than later. Domestic demand levels in the Far East are still depressed, and with little interest in imports from US buyers for over a month now due to softening US spot prices, offshore mills will need to widen the gap between their own offer prices and prices in the US in order to boost futures bookings.

It is not yet certain exactly how much prices could drop, but US buyer sources have told SteelOrbis that the disparity may need to increase substantially from the current $1.00-$3.00 cwt. ($22-$66/mt or $20-$60/nt) margin for them to place any significant offshore orders. As for Mexico, mills have been making deals when necessary to fill order books; however, with a substantial decrease in US domestic spot prices in the last week, and rumored price declines from offshore, Mexican sales prices in the US could also drop over the next few weeks.

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