LOS ANGELES Flat-rolled steel prices continue to fall on the West Coast amid indications that some offshore suppliers want to re-enter the market.
Domestic hot-rolled coil prices for certain large service centers and end-users have fallen below $640 per ton ($32 per hundredweight) delivered into the region. This appears to represent as much as another $10-per-ton price cut, on top of the $20-per-ton decline to $640 to $660 per ton ($32 to $33 per cwt) reported earlier this month (amm.com, April 9).
There have been no general price announcements from either of the regions two major flat-rolled producers since California Steel Industries Inc. (CSI), Fontana, Calif., increased hot-rolled sheet by $30 per ton and cold-rolled and galvanized sheet by $50 per ton effective Feb. 28. Pittsburg, Calif.-based USS-Posco Industries Inc., CSIs Chief rival, followed with an increase of $30 per ton on hot-rolled pickled and oiled sheet and $50 per ton on cold-rolled and galvanized sheet effective March 1.
But the hikes were only partially successful at best, market sources said, and it wasnt too long before they began to slide again.
There are also indications that some foreign flat-rolled sources are heating up the competition. Chinese cold-rolled materialwhich had climbed to more than $700 per ton ($35 per cwt) ex-dock after hitting a low point of about $32 per cwt in the third quarter of last yearhas been falling once again, reaching an estimated $670 per ton ($33.50 per cwt) for July shipment. Moreover, some buyers see South Korean hot-rolled, which had reportedly been offered to many service centers at $630 to $640 per ton ($31.50 to $32 per cwt) previously, arriving here at prices as low as $600 per ton ($30 per cwt) in June for larger buyers.
Nevertheless, buyers made the point that a minimum discount of $30 to $40 per ton isnt enough to lure them overseas, especially with a weakening price outlook for the West Coast moving into the summer, and with lead times on hot-rolled product as short as three weeks, not counting another two weeks or more if shipments come from the Midwest.
"Why sit on two-month lead times in a declining price environment?" one service center buyer asked.