LOS ANGELES Flat-rolled steel prices are falling on the West Coast on what appears to be ample domestic supply from mills both inside and outside the region.
Hot-rolled coils delivered in this market from domestic mills have declined about $20 per ton during the past month to a reported $640 to $660 per ton ($32 to $33 per hundredweight) for medium to large service centers.
The decline is seen as being driven more by pricing from domestic mills east of the Rockies rather than by such foreign sources as South Korea and Mexico, whose prices in recent months have become less attractive to some buyers. How soon offshore mills might react to their diminishing competitiveness isnt clear.
Neither of the West Coasts major flat-rolled steel producers, which had posted higher prices for March and reportedly passed on April hikes, have yet to announce general increases for May, according to market sources. Fontana, Calif.-based California Steel Industries Inc.s last reported increase, announced in February, was $30 per ton on hot-rolled sheet products and $50 per ton on cold-rolled and galvanized sheet, effective Feb. 28. Pittsburg, Calif.-based USS-Posco Industries Inc. previously said it would boost hot-rolled picked and oiled by $30 per ton and cold-rolled and galvanized by $50 per ton effective March 1 (amm.com, March 20).
While most buyers agreed that hot-rolled lead times are now officially into May, they have little doubt they could find a mill willing to ship material in April.
Meanwhile, the price of Chinese cold-rolled productwhich dominated the commercial-quality coil market for most of last yearhas been quoted in a range of $680 to $700 per ton ($34 to $35 per cwt) for delivery this summer, about $1 per cwt less than earlier offers but still substantially higher than its lowest 2012 prices. Moreover, there are indications that locally produced cold-rolled tonnage is being offered at least $50 per ton lower than it was two months ago in an effort to win back market share lost to the Chinese.
Perhaps whats most striking in the current market is a growing sentiment that any pricing turnaround is unlikely in the next quarter, or possibly even the next six months.
"I see prices going in the same directiondownto November," a service center buyer said. "From now until then, my job is to turn my steel into cash so Ill have the money to buy steel then at the years lowest prices."