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W. Coast buyers see foreign mills raising tags

Keywords: Tags  West Coast steel market, flat-rolled steel, steel imports, import prices, steel prices, Frank Haflich

LOS ANGELES — West Coast buyers of flat-rolled steel expect foreign mills to move for a price increase after remaining surprisingly competitive on early 2014 arrivals.

After seeing only slight increases, if any, for delivery in January and early February, buyers said it’s likely that offshore producers and traders might try to push through more significant hikes in the next round of offers.

Stiff import competition, along with demand from this region’s consuming industries that’s less robust than the Midwest, has prevented steel tags from rising at the same pace as markets east of the Rockies, according to some buyers.

"It’s like there are two economies," one distributor said, comparing flat-rolled demand in the Midwest with what he and others describe as a continuing struggle to raise West Coast resale prices.

But a growing number of market sources think it’s likely that the next round of import offers, expected during the next week or two, could reflect a broader push by overseas mills to implement hikes after 2013, which ended up with what some regard as only halfhearted attempts to boost prices. Buyers also point out that importers are doing little to discourage this outlook.

"They’re telling me they might now have a limited supply (going forward)," one market source said of his South Korean coil mills, whose hot-rolled material is generally seen as the leading import factor. Prices for the product were recently in the range of $600 to $610 per ton ($30 to $30.50 per hundredweight) ex-dock for delivery in January or early February.

This compares with recent attempts to raise domestic hot-rolled coil prices by $34 to $35 per cwt for January from an earlier estimated $32 per cwt in late 2013 but as high as $37 per cwt or more delivered from east of the Rockies, where mill increases have reportedly met with greater success.

While initial New Zealand hot-rolled offers to the trade were estimated at around $33 per cwt in the most recent round, some buyers think these might have been negotiated down to $31 to $32 per cwt.

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