LOS ANGELES West Coast prices for flat-rolled steel appear to have leveled out as buyers report theyre not paying any more for February material than they did for January.
"Nobody is seeing the type of demand where they can even think about a price increase," one buyer said of steel mills serving the region.
Neither of the West Coasts two major flat-rolled producersCalifornia Steel Industries Inc., Fontana, Calif., and USS-Posco Industries Inc., Pittsburg, Calif.have announced industry-wide price changes, in keeping with their recent months policy.
Prices for domestic hot-rolled coil delivered to the West Coast market are estimated at $670 to $690 per ton ($33.50 to $34.50 per hundredweight), about $1.50 to $2 per cwt higher than before price hikes were first announced in October, with tags moving above or below the range depending on the size of the buyer and its relationship with the mill, among other factors.
Meanwhile, recent offers of Chinese cold-rolled coil continue to indicate a base price in the neighborhood of $690 per ton for April arrival, an estimated $50 to $60 per ton ($2.50 to $3 per cwt) below domestic prices. That is far narrower than the $120-per-ton spread between Chinese and domestic prices reported at times last year, although market sources said its not yet clear if a substantial requirement wouldnt attract a lower Chinese price.
While some market sources expressed disappointment that they havent yet seen the new year "pop" in demand that occurred in the past few years, others prefer to view the current market as a glass half-full.
"I dont think theres been any radical price changes anywhere in the country, and the West Coast has maybe been firmer than anywhere else," said one buyer, who cited slight signs of price erosion at mills east of the Rockies.
Some buyers pointed out that, with mills in the Midwest offering to deliver steel to nearby customers in less than a month, theres little reason for anyone in the U.S. market to bring anything more than the bare minimum into their warehouses.
"You dont add to your inventory in a market with two- and three-week inventories," a source at a manufacturer said.