Despite the news of Nucor Sheet Mill Group upping flat rolled prices $30 /nt for August shipments, hot dip galvanize (HDG) prices are actually beginning to soften, as the upward price momentum has ceased.
Earlier last week, Nucor announced a $30 /nt ($1.50 cwt. or $33 /mt) minimum price increase for its flat rolled products for the month of August. However, in combination with the price increase announcement, Nucor lowered the cost for some extras for its zinc coated products, resulting in no net price move for some galvanized products. The reduction in extras cost was not uniform, however, as it varies by size and thickness, so the net effect for some products was a price decrease (while a few also increased).
For HDG 0.019" x 48" G90, Nucor upped its base price by $30 /nt ($1.50 cwt. or $33 /mt), causing July's base price for the product to rise to $59.50 cwt. ($1,312 /mt or $1,190 /nt). However, the coating extra was reduced, resulting in an actual $0.25 cwt. ($5.51 /mt or $5 /nt) decrease in the net transaction price. For HDG 0.019" x 48" G90, the going price at Nucor is now $69.75 cwt. ($1,538 /mt or $1,395 /nt).
The decrease in price for extras is mainly due to the falling zinc prices. Zinc prices have fallen below the $2,000 /mt ($90.72 cwt. or $1,814 /nt) mark and are currently pricing out at $1,900 /mt ($86.18 cwt. or $1,724 /nt) approximately.
Other US mills, besides ArcelorMittal and US Steel who announced prices for both July and August, have yet to come out with an August increase. At this point though, demand is said to be falling off and mills are having a hard time filling their order books for galvanized products. The market seems to be leveling off and, whereas a couple of weeks ago galvanized prices were all over the map, now prices are finding a common ground. The large $4.00 cwt. ($88 /mt or $80 /nt) price spread has shrunk and the top of the price range has been knocked down, leaving the bottom of the price range to control the market.
Domestic HDG 0.019" x 48" G90 range from $69.75 cwt. to $72.00 cwt. ($1,538 /mt to $1,587 /mt or $1,395 /nt to $1,440 /nt) ex-mill Midwest. Prices on the West Coast are approximately $3.00 cwt. ($66 /mt or $60 nt) greater.
Currently, HDG demand is soft due to the slow construction and automotive markets, along with the usual summer doldrums, and it is not expected to see a major up-tick once autumn arrives. In fact, many buyers feel that the market is not only leveling off finally, but is beginning its downward pricing trend, which will continue until the end of this year. After August, we may not see any more price increases for some time.
On the import side, offers are still surfacing; however, the numbers are not as attractive as they were a month ago. Imports are also expected to slow down after the third quarter.
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. For August production HDG 0.019" x 48" G90, there are currently no new offers; however, there is market chatter suggesting that the Chinese mills are having trouble getting orders and may move their prices down a notch for their next offering.
Taiwan is offering HDG 0.019" x 48" G90 to the US at slightly higher numbers than their last offering. Taiwanese offers currently range 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 Coast ports. Prices are approximately $1.00 cwt. ($22 /mt or $20 /nt) lower delivered to the West Coast.
Offers from India for 0.012" by 40.875" G30 have remained at the same levels as reported by SteelOrbis last week, with offers high due to the five percent Indian export tax on galvanized products. There are not many takers for these offers which 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 $74.00 cwt. ($1,609 /mt to $1,631 /mt or $1,460 /nt to $1,480 /nt) FOB mill. As for imports, Taiwan has come out with new offers since our last report, approximately $2.00 cwt. ($44 /mt or $40 nt) higher. Taiwanese offers are in the range of $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 and West Coast. Indian offers have remained stable since our last report and still 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.