NEW YORK Flat-rolled steel buyers on the West Coast are looking to late November for clues on the strength of recent price hikes.
With several large buyers pretty much set for the year as the regions mills have largely filled out their order books for 2012, indications are that the strength of recently announced increases will start to become clear when customers return from the Thanksgiving holiday.
"I havent paid more for steel yet, but I do expect to pay more for January," according to one service center buyer, who, like several others, managed to fill out this years requirements at pre-increase price levels.
"I know I can still get hot-rolled out of the Midwest for December," according to another buyer, whose requirements for the year have essentially been filled. "But I dont know what the price would be."
While neither of the regions two major flat-rolled producers had announced a second series of hikes as this week kicked off, buyers expect them to move "momentarily" and join a round initiated earlier this month by West Chester, Ohio-based AK Steel Corp. and followed by most producers east of the Rockies.
California Steel Industries Inc. (CSI), Fontana, Calif., previously said it would raise prices $40 per ton ($2 per hundredweight) on hot-rolled, cold-rolled and galvanized sheet effective Oct. 18, while USS-Posco Industries Inc. (UPI), Pittsburg, Calif., told customers it would increase prices on cold-rolled and galvanized products by the same amount, also effective Oct. 18 (amm.com, Oct. 18).
Most buyers said the prices they are being quoted now are $15 to $25 per ton (75 cents to $1.25 per cwt) higher than before the increase. They expect hot-rolled prices could reach $35 per cwt ($700 per ton) or higher, with a price level before the first round of hikes estimated at approximately $33 per cwt ($660 per ton).
Meanwhile, some key imports that have kept pressure on West Coast mills this year have also gone up. Large Chinese cold-rolled producerswho in recent months offered the biggest discounts to domestic materialhave reportedly surpassed previous offers by $15 to $30 per ton, to stand at $33.50 to $34 per cwt ($670 to $680) for cold-rolled sheet for February arrival.
Buyers said CSI has closed its order books for 2012, while UPI has closed out galvanized but will still take limited orders for cold-rolled product. UPI expects to be down for maintenance beginning Nov. 19 for the Thanksgiving holiday, and hasnt yet determined its schedule for the balance of the year.
CSI will bring its hot mill down from Nov. 21 to Nov. 27 and again from Dec. 2 to Dec. 12, according to sources. In addition, its pickling line will be down from Dec. 5 to Dec. 18, while the five-stand mill will be offline from Dec. 8 to Dec. 19, the sources said.
A spokeswoman for CSI could not be reached for comment.
If local mills are unable to ship the influx of orders that came in to beat out the recent price hike before year-end, this could temporarily help push prices up moving into the first quarter, some buyers warned.