Now that most of the major flat rolled mills have announced prices for July shipments, buyers are speculating that the market may be close to its peak.
As previously reported by SteelOrbis, AK Steel announced to customers that it will increase spot prices for its carbon steel products by $75 /nt ($3.75 cwt. or $83 /mt) for all new orders, making AK the first major US mill to announce prices for July production. AK Steel's galvanized base price is currently $62.25 cwt. ($1,372 /mt or $1,245 /nt). ArcelorMittal announced its flat rolled prices in recent days, with hot dip galvanized (HDG) base prices at $59.00 cwt. ($1,301 /mt or $1,180 /nt) for July and August shipments. Nucor made a surprising announcement on Wednesday, upping HDG prices by $60 /nt ($3.00 cwt. or $66 /mt) effective for July shipments making Nucor on the lower side of the range, with HDG base prices at $58.00 cwt. ($1,279 /mt or $1,160 /nt).
These recent price increases put galvanized prices all over the map. For July shipments, domestic HDG 0.019" x 48" G90 are ranging from $70.00 cwt. to $74.00 cwt. ($1,543 /mt to $1,651 /mt or $1,400 /nt to $1,480 /nt) ex-mill. West Coast production is approximately $3.00 cwt. ($66 /mt or $60 /nt) higher.
With busheling scrap prices going up so drastically earlier this month, some buyers were expecting a larger flat rolled increase. Is it possible that the rapid price rises are finally beginning to lose their momentum? Some market players believe the peak is near and within the next couple of months, the market will regain some stability. However, scrap is said to be trending upwards again, so that may push prices up a little more, before they start to come down.
Although prices are continually climbing, demand for galvanized products is pretty dim on a historical level. Out of the three flat rolled products, galvanized is showing the weakest demand, mostly due to the weak construction and automotive markets. However, seasonal up-ticks are being seen in the construction market.
On the import side, new offers have been surfacing that are lower by a reasonable amount than current domestic numbers. The gap is widening between domestic and imports, and in turn it may push buyers to do a little more offshore business.
For HDG 0.019" by 48" G90 items from Taiwan, offers have remained stable since our last report two weeks ago and are still ranging from $70.00 cwt. to $72.00 cwt. ($1,543 /mt to $1,587 /mt or $1,400 /nt to $1,440 /nt) FOB loaded truck West Coast for September or October deliveries.
Offers from China for the same size have increased by $3.00 cwt. ($66 /mt or $60 /nt) since our last report; however they are still significantly lower than domestic prices. Chinese offerings for HDG 0.019" by 48" G90 are ranging from $68.00 cwt. to $70.00 cwt. ($1,499 /mt to $1,543 /mt or $1,360 /nt to $1,400 /nt) FOB loaded truck West Coast ports for September or October deliveries.
Offers from India for 0.012" by 40.875" G30 can be found ranging from $70.00 cwt. to $72.00 cwt. ($1,543 /mt to $1,587 /mt or $1,400 /nt to $1,440 /nt) FOB loaded truck Gulf ports for third quarter deliveries. So far, the effect of the Indian export tax of five percent on galvanized products has yet to be seen in the US. As of May 10, 2008, the taxes were put in place. Steelmakers are now urging the Indian government to remove the tax, and are in return offering lower steel prices to the domestic market with hopes the government will rethink the tax; however, as of now, it has not been removed.
For the same size, 0.012" by 40.875" G30, China is also offering with prices a few dollars lower. Chinese offerings continue to be in the range of $68.00 cwt. to $70.00 cwt. ($1,499 /mt to $1,543 /mt or $1,360 /nt to $1,400 /nt) FOB loaded truck West Coast.
On the galvalume side of the market, for 0.019" by 48" AZ55 items, domestic prices have increased as well and are now ranging from $73.00 cwt. to $75.00 cwt. ($1,609 /mt to $1,653 /mt or $1,460 /nt to $1,500 /nt) FOB mill. As for imports, Taiwan is offering at numbers below the domestic price. Taiwanese offerings for 0.019" by 48" AZ55 are still in the range of $68.00 cwt. to $70.00 cwt. ($1,499 /mt to $1,543 /mt or $1,360 /nt to $1,400 /nt) FOB West Coast for October arrivals. Indian offers continue to range from $70.00 cwt. to $71.00 cwt. ($1,543 /mt to $1,565 /mt or $1,400 /nt to $1,420 /nt) FOB Gulf Coast for July or August deliveries.