Once again, prices are headed up for flat rolled products in the US, as a couple of major mills have already announced large increases for July production.
As previously reported by SteelOrbis, last week 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. AK Steel was the first major US mill to announce prices for July production; however, the other major US flat rolled mills will be increasing their prices as well.
For hot dip galvanized (HDG) products, there are some mills that still have June tons available; however, other mills, like Nucor, are sold out of their June tons. Nucor's pricing for July is expected to increase, but it's tough to say by how much at this point. To keep Nucor on track with Ohio-based AK Steel's base pricing, the company would have to raise its prices by $120 /nt ($6.00 cwt. or $132 /mt). Some market players say this is too large a jump for Nucor, especially after last month's $180 /nt ($9.00 cwt. or $198 /mt) increase. Yet, with scrap climbing up significantly again this month, it is certainly possible.
Domestic HDG prices have been inching up over the past couple of weeks, and, realistically, the going price from any mill with June tonnage still available is $70.00 cwt. to $72.00 cwt. ($1,543 /mt to $1,587 /mt or $1,400 /nt to $1,440 /nt) for HDG 0.019" by 48" G90.
The domestic pricing trend is strongly up as these prices are expected to climb at least $3.50 cwt. ($77 /mt or $70 /nt) if not more, due to the July hot rolled increases that are coming.
On the West Coast, last week USS-POSCO announced a $150 /nt ($7.50 cwt. or $165 /mt) increase for July orders; however, even with this large increase, the company's prices are still slightly behind its competitors' June prices.
Although prices are continually climbing, demand for galvanized products is pretty dim. Out of the three flat rolled products, galvanized is showing the weakest demand, mostly due to the weak construction and automotive markets. In fact, some mills are quoting HDG base prices below the cold rolled base price level, which is rarely seen.
For the most part, import prices have been directly in line with their domestic counterparts. Nevertheless, new offers have been surfacing that are lower by a reasonable amount than current domestic numbers. Also, domestic prices are expected to climb a few dollars within the next couple of weeks, which will widen the gap between domestic and imports, and in turn may push buyers to do a little more offshore business.
For HDG 0.019" by 48" G90 items from Taiwan, offers are 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.
Offers from China for the same size have surfaced and are decently below the domestic numbers. Chinese offerings for HDG 0.019" by 48" G90 are quite attractive, ranging from $65.00 cwt. to $67.00 cwt. ($1,433 /mt to $1,477 /mt or $1,300 /nt to $1,340 /nt) FOB loaded truck West Coast ports for August or September 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. India is now absorbing the extra costs; however, it is expected that, eventually, US buyers will be responsible for at least a portion of the added costs. Even so, with the rate in which domestic prices are climbing, these offshore offers may still be lower. Talk of India stopping galvanized exports due to the tax has been a concern for some buyers; however, India's domestic market cannot handle all of the HDG material that their mills produce, and so it is doubtful that the country will stop exporting to the US all together.
For the same size, 0.012" by 40.875" G30, China is also offering with prices a few dollars lower, though up $3.00 cwt. since our report two weeks ago. Chinese offerings are now 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.
Comparatively, for 0.012" by 40.875" G30 material, the domestic price currently ranges from $72.00 cwt. to $75.00 cwt. ($1,587 /mt to $1,653 /mt or $1,440 /nt to $1,500 /nt) for June tonnage that is still available and it is on its way up.
On the galvalume side of the market, for 0.019" by 48" AZ55 items, given June tonnage is still available, domestic prices continue to 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 mill. As for imports, Taiwan is offering at numbers below the domestic price. Taiwanese offerings for 0.019" by 48" AZ55 are 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 are comparable to the domestic numbers, though they are for September arrivals, while domestic prices are for June deliveries. Indian offers are ranging 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.