NEW YORK A number of inventory-lean steel mills in Asia are said to be bracing for a possible impact from the ongoing strike at the ports of Los Angeles and Long Beach in California.
Several U.S. scrap exporters and buyers for some mills in East Asia said the strike could cause delays in shipments of containerized ferrous scrap lasting up to five days, a prospect that has alarmed receiving mills running low on inventory. For other mills with more material on hand, the impact will be minimal, sources said.
Dockworkers at seven of eight container terminals in Los Angeles and as many as three of six terminals in Long Beach are honoring picket lines by clerical members of the International Longshore and Warehouse Union (amm.com, Nov. 30). The workers contend that shippers are outsourcing their jobs overseas, although shippers say thats not the case.
Hopes that weekend talks would yield positive results were dashed Monday after logistics companies informed exporters that negotiations had failed.
"In the case of bulk shipments, we dont have any problem because there were no new contracts. But on the container side, we are facing a big problem," a scrap buyer for a South Korean mill said. "Some of our containers have stopped loading, and we are waiting for the negotiation to finish."
A buyer for another mill in South Korea told AMM that the impact would only be considerable for Asian mills in need of scrap.
"Both inbound and outbound container transactions are still blocked. Participants in the logistics market are expecting the labor union will reach an agreement early this week. Container ocean freight is not influenced by this strike. The big problem is delivery-time delay for buyers in Asia," he said.
"Vessels are floating in the harbor and outside the breakwater waiting. Its a bad situation," a third source added.
Exporters have sought alternate storage locations for containers unable to reach the port, as well as expressed dismay at their inability to pull containers out of the port.
"Mills are going to have to take into consideration that things are going to be a week late, maybe a little more or less. So if theyre running low on inventories, theyre going to be concerned," a fourth source said. "But were not panicking at this time. This strike should have minimal impact on the bottom line."
Meanwhile, the largest individual steel importer into the Port of Los Angeles, Fontana, Calif.-based California Steel Industries Inc., which transports slabs to its facilities for conversion into flat-rolled products, confirmed the walkout has had "no impact" on its operations since the ports bulk terminal run by Pasha Stevedoring & Terminals, Wilmington, Calif., is covered by a different labor agreement. Other import sources reported late last week that their arrivals hadnt been disrupted, either.
At the Port of Long Beach, a spokesman said that the strike had not affected its steel importing activities, since its bulk terminal has remained in operation.
Frank Haflich, Los Angeles, contributed to this story.