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W. Coast flat-roll hike puts buyers on standby

Keywords: Tags  steel, flat-rolled steel, steel prices, West Coast prices, California Steel Industries, CSI, USS-Posco, Frank Haflich

LOS ANGELES — West Coast mills have joined a nationwide movement to boost flat-rolled steel prices, but several buyers say they’re taking a wait-and-see stance.

California Steel Industries Inc. (CSI), Fontana, Calif., told customers this past week that it had raised cold-rolled and galvanized coil prices by $45 per ton and boosted hot-rolled coil prices by $30 per ton, while USS-Posco Industries Inc., Pittsburg, Calif., hiked cold-rolled, galvanized and hot-rolled picked and oiled coil by $45 per ton, according to market sources. Those increases were effective Jan. 24, the sources said.

Greater activity in the construction sector—a crucial market on the West Coast for flat-rolled steel and long products—has made some optimistic that prices could firm. On the other hand, three-week lead times for hot-rolled coil—or less, in the case of some Midwest mills—have kept some buyers skeptical.

"It’s hard to sell a price increase with lead times like that," one service center executive said.

Prior to the increase, domestic hot-rolled coil delivered to the West Coast was estimated in a range of $670 to $690 per ton ($33.50 to $34.50 per hundredweight), depending on the size of the buyer and its relationship with the mill.

"I’m moving steel pretty quickly, so I pretty much have to buy (domestic steel at the mills’ stated price)," one manufacturer said. However, he also noted that foreign hot-rolled prices have remained attractive, and for this reason he expects to split his 2013 purchases evenly between domestic and imported material.

Hot-rolled imports from the Asia-Pacific region slated for April arrival been reported in the range of $33 to $34 per cwt ex-dock, although some sources believe that substantial orders could bring the price down to $32 per cwt.

Moreover, some other buyers, especially service centers, noted that their own warehouses remain in good shape. They see little urgency to jump at new, higher prices, and when they require material they can do "buyouts" from other distributors.

"I don’t have that many holes to fill, and if I do have a need the first ones I’ll probably call are my competitors," one processor said of his inventory, also noting that imports appear to be available from local warehouses.

Meanwhile, one imported product that has failed to retain its former allure is cold-rolled coil from China. The latest quotes for April shipment have been reported at about $34.50 to $35.50 per cwt ex-dock, putting the discount to domestic product at only about $40 to $60 per ton vs. a spread of $120 per ton or more at one point last year.

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