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W. Coast mills hike flat-rolled steel prices

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

LOS ANGELES — Demand for flat-rolled steel remains unspectacular but nevertheless consistent on the West Coast as mills continue to push for price increases.

Service centers in particular described their traffic as "slow but steady." For many of them, that’s an improvement over a market in which demand had been lagging badly in recent months.

Both of the region’s major flat-rolled producers announced price hikes effective Jan. 24. California Steel Industries Inc. (CSI), Fontana, Calif., boosted cold-rolled and galvanized sheet by $45 per ton ($2.25 per hundredweight) and hot-rolled by $30 per ton ($1.50 per cwt), while USS-Posco Industries Inc., Pittsburg, Calif., boosted tags on cold-rolled, galvanized and pickled and oiled sheet by $45 per ton.

"The increases have had kind of a lukewarm reception, but at least we stopped any bleeding," one buyer said. Moreover, he and others noted that the West Coast didn’t see flat-rolled prices decline as much as the rest of the country did early this year.

"If you need a decent amount of tons, it’s probably still a buyers’ market," a market source said, noting that early this week lead times for rollings at mills east of the Rockies were less than two weeks.

CSI told customers this week that it had closed its March order book for galvanized sheet, according to market sources. A CSI spokeswoman couldn’t be reached for comment Feb. 14.

Hot-rolled coil is reported in a range of $670 to $700 per ton ($33.50 to $35 per cwt) delivered, depending on the size of the buyer and its history with the mill.

Meanwhile, the price advantage of Chinese cold-rolled coil over domestic cold rolled appears to be narrowing even further. Quotes for April shipment rose 50 cents to $1 per cwt over previous offers to $35 to $35.50 per cwt ex-dock, a spread some buyers estimated at only about $20 to $30 per ton less than the lowest-priced domestic cold-rolled available. In contrast, Chinese mills had an advantage as great as $120 per ton over domestic mills at one point last year.

However, market sources caution that many players in China are still on vacation for the Lunar New Year, and it’s not clear just how competitive traders might become once they return and start bargaining in earnest. Some recent flat-rolled offers from South Korea also represent price hikes that narrow the gap with domestic product.

"I’m not seeing any imports that I consider very attractive," one hot-rolled buyer said, although he noted that previously ordered low-priced material had yet to arrive at West Coast ports. Also, some larger buyers have taken advantage of Mexican hot-rolled for April delivery priced to larger buyers at an estimated $620 to $640 per ton ($31 to $32 per cwt).

For others, paying $10 to $15 per ton (50 to 75 cents per cwt) more on higher-cost items such as galvanized is a workable option.

"We have the luxury today of balancing out our inventory by making spot buys of just a couple of truckloads" of domestic material, a buyer said, noting that during periods of more-robust demand it often wasn’t possible to buy just 40 to 50 tons at the mill.

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