LOS ANGELES An increase in West Coast flat-rolled steel prices appears more and more likely, although plenty of skeptics remain unconvinced of the possibility.
Fontana, Calif.-based California Steel Industries Inc. (CSI) told customers this past week that it was boosting prices by $30 per ton on hot-rolled and hot-rolled pickled and oiled sheet and $50 per ton on cold-rolled and galvanized sheet, effective Feb. 28, according to market sources.
While Pittsburg, Calif.-based USS-Posco Industries Inc. hadnt announced its own increase by March 1, most buyers expect CSIs chief rival to follow the increases.
Hot-rolled coil prices delivered into the West Coast market were reported recently in a range of $650 to $680 per ton ($32.50 to $34 per cwt) for larger service centers.
While pricing bears noted that West Coast hikes of $30 per ton on hot-rolled and $45 per ton on cold-rolled and galvanized that were announced for late February didnt catch on, other sources believe there could be room for at least a partial rise.
"I think its going to fly, at least in part, if for no other reason than theres nothing to stop it," said one buyer, pointing out that imports now being quoted for arrival in May and June reflect "numbers that arent that attractive."
Others described CSIs decision to boost hot-rolled by $30 per ton as more "realistic" than the across-the-board increases of $50 per ton announced by mills east of the Rockies.
Moreover, construction-related buyingwhich supports a majority of flat-rolled sales in the Westmight finally reflect residential building activity that was absent in recent years, some market sources said.
Quotes on Chinese cold-rolled sheet continue to move up, and in some cases are more than $720 per ton ($36 per cwt) for May delivery. This would further narrow what last year was considered a near-insurmountable price disadvantage of $120 per ton or more for domestic coil to near parity, although the Chinese could subsequently drop prices if they get little response to their initial offers.
Still, lead times for hot-rolled remain at four weeks or less, which isnt usually considered bullish for prices.
"Theres no shortage of people willing to sell hot-rolled into this market," a buyer said.