Will US mills’ flat rolled price increases lead to upticks in US import HDG bookings?

Yesterday, ArcelorMittal USA announced they would be raising prices for all non-contract hot dipped galvanized (HDG) spot market pricing by $1.50 cwt. ($33/mt or $30/nt) effective for all new orders.   Other US domestic flat rolled steel mills have yet to announce a similar increase, but many sources close to SteelOrbis believe those announcements are still pending.

“It took some time for all that excess inventory to be worked through, but with China out of the picture due to the trade case, things finally seem closer to being right-sized.  Between this, and seasonal upticks in demand in the construction sector, HDG is doing pretty good right now, which has helped push domestic pricing upward,” one Midwest-based source said.
Trader sources also have said that firmed US domestic spot market prices have led to increased interest in ex-Brazil HDG and Galvalume.

Current futures offer prices from Brazilian steelmakers for 0.019’ x41.5625’ Gr80/AZ55 Galvalume coil are trending at approximately $35.00 cwt. ($772/mt or $700/nt), DDP loaded truck US Gulf coast ports.  Sources close to SteelOrbis have confirmed that Brazilian steelmakers exported 8,300 mt of Galvalume coil to the US in January, which reflects a 36 percent month-on-month increase from levels seen in Dec. 2015.

Current futures offer prices from Brazilian steelmakers for 0.12”x40.875” G30 coil are being offered in the approximate range of $32-$33 cwt. ($705-$728/mt or $620-$660/nt), DDP loaded truck in US Gulf coast ports. 

In terms of the still-pending HDG trade case, while some US buyers say they’ve been reluctant to book tonnages from Indian steelmakers due to concerns that the final determination margins will be “much higher” than the preliminary margins, which trended between 6.64 percent and 6.92 percent, others say they believe that the final determinations will “be fairly close to what the US DOC announced early on.”

It is further believed that the preliminary margins against Taiwanese HDG producers, which were calculated at zero percent, will go up once the final determinations are announced.