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Fate of W. Coast flat-roll price hikes uncertain

Keywords: Tags  flat-rolled steel, cold-rolled, hot-rolled, CSI, USS-Posco, Frank Haflich

LOS ANGELES — Flat-rolled steel price increases on the West Coast this month are being greeted cautiously by buyers, who say there is too much uncertainty at this point to jump on board.

While there has been some limited upward movement in transaction prices, with hot-rolled sheet up $8 to $10 per ton from some buyers’ previous purchases, most market sources aren’t losing any sleep over the possibility that prices will take off anytime soon.

"The lead times are too short," said one buyer, who, like some others, noted that hot-rolled sheet from east of the Rockies originally quoted for production about four weeks out is instead being shipped up to two weeks earlier in some cases.

Fontana, Calif.-based California Steel Industries Inc. (CSI) told customers it would raise the price of hot-rolled sheet products by $30 per ton and cold-rolled and galvanized sheet by $50 per ton, effective Feb. 28 (, March 1). CSI’s chief rival, Pittsburg, Calif.-based USS-Posco Industries Inc., said it would hike hot-rolled pickled and oiled sheet by $30 ton and cold-rolled and galvanized sheet by $50 per ton effective March 1, according to industry sources.

Service center sources said they’re having difficulty raising their own prices in line with the mills’ recent announcements. Moreover, indications are that some traders who significantly boosted their prices now appear to be having second thoughts.

Hot-rolled coil prices delivered into the West Coast market are estimated at $660 to $680 per ton ($33 to $34 per hundredweight) to medium- and large-size service centers.

While some larger end-users are bringing in imported hot-rolled product ordered previously at as low as $600 to $620 per ton ($30 to $31 per cwt) for second-quarter arrival, South Korean hot-rolled steel was initially quoted for arrival in late May or early June at $700 per ton ($35 per cwt) but more recently has come down to about $680 to $685 per ton ($34 to $34.25 per cwt).

"That’s not going to get it done," one of several buyers said of the Korean offers, adding that overseas mills must lower their quotes even more to make it worthwhile to order for arrival in the late second quarter and early third quarter, when they fear prices might once again erode.

Cold-rolled steel from China, which last year sank to a base price as low as $640 per ton ($32 per cwt), was initially quoted for June arrival at $720 to $740 per ton ($36 to $37 per cwt), but more recently has been reported at $700 per ton ($35 per cwt). However, even the lower price represents just a $60- to $80-per-ton discount to domestic cold-rolled product, which is estimated at $760 to $780 per ton ($38 to $39 per cwt), and compares unfavorably with a discount that was as high as $140 per ton at one point in 2012.

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