Domestic hot dip galvanized (HDG) prices in the Midwest have not moved since the last set of price increase announcements from major mills a couple of weeks back, suggesting the possibility that the market may be close to its peak.
For July shipments, domestic HDG 0.019" x 48" G90 range 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 Midwest.
The price spread is quite a large one, as the major US flat rolled mills all had a different increase in mind when making their July announcements. Where AK Steel pushed its galvanized coil base price up to $62.25 cwt. ($1,372 /mt or $1,245 /nt), Nucor came in on the low end at $58.00 cwt. ($1,279 /mt or $1,160 /nt). Other mills found themselves right in the middle of this range, with some announcing that the current prices were valid through August shipments, creating a significant difference in price from mill to mill. Although so far AK Steel has not lowered its price to mirror its competitors, going forward, market conditions may force AK to lower its price, one penny at a time.
HDG demand is far from terrible; however, buyers are suggesting that demand for all flat rolled products is showing some signs of weakening. The weak construction and automotive markets are major contributors to the falling demand for HDG, and buyers have commented that mills are struggling to fill their order books. Business is still steady, but unlike a couple of months ago, it is difficult for mills to sell out immediately. It's difficult to say if the industry is seeing the typical summer doldrums or if the market has finally hit its peak and is beginning to soften, but either way, buyers are noticing a difference, and time will tell if the change is seasonal or long term.
While domestic prices had headed significantly upwards, import offers were beginning to look more attractive in recent weeks. That trend may be coming to an end, though. Last month, buyers were noticing a decent-sized gap forming between domestic prices and the Asian and Indian import offers that were surfacing; however, more recently, import offers have started to head upwards, closing the gap.
Under government mandate, Chinese steel products for July production will not be available for exports, as they are to remain in the domestic market to be used in the relief efforts for the devastating May 12 earthquake in China. Going forward, however, there are offers from Chinese mills for HDG 0.019" by 48" G90 for August production, arriving to the US in October. These offers are up $1.00 cwt. ($22 /mt or $20 /nt) and are expected to increase further.
Chinese offerings for HDG 0.019" by 48" G90 are now ranging from $69.00 cwt. to $71.00 cwt. ($1,521 /mt to $1,565 /mt or $1,380 /nt to $1,420 /nt) FOB loaded truck West Coast ports for October deliveries.
For the same size, there are currently no Taiwanese offers, although new offers are expected to come out shortly and are expected to be higher than offers that were present in the market two weeks ago [$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] due to the impact of the earthquake in China.
Offers from India for 0.012" by 40.875" G30 have also increased due to the five percent Indian export tax on galvanized products. Offers have increased by $2.00 cwt. ($44 /mt or $40 /nt) since our last report two weeks ago and now range from $72.00 cwt. to $74.00 cwt. ($1,587 /mt to $1,631 /mt or $1,440 /nt to $1,480 /nt) FOB loaded truck Gulf ports for October deliveries.
On the galvalume side of the market, for 0.019" by 48" AZ55 items, domestics are 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 has not come out with new offers since our last report; however offers are expected to be higher than the $68.00 cwt. to $70.00 cwt. ($1,499 /mt to $1,543 /mt or $1,360 /nt to $1,400 /nt) range reported two weeks ago. Indian offers have increased by $1.00 cwt. ($22 /mt or $20 /nt) since our last report and now range from $71.00 cwt. to $72.00 cwt. ($1,565 /mt to $1,587 /mt or $1,420 /nt to $1,440 /nt) FOB Gulf Coast.