LOS ANGELES The
South Korean parent of USS-Posco Industries Inc. (UPI) has
"stepped up" to supply a majority of feedstock to the West
Coast flat-rolled producer, which also is charging a premium
for its products made from domestic hot bands, according to a
Posco Ltd. now
supplies the majority of hot bands being converted by the
Pittsburg, Calif.-based producer, a UPI spokesman said,
confirming market reports but declining to disclose the
percentage being shipped by the Korean mill. Traditionally,
Posco and its partner, U.S. Steel Corp., each provided 50
percent of UPIs bands.
However, the UPI
spokesman noted the change doesnt signal any retrenchment
by UPI, which is considered one of the West Coasts two
major flat-rolled producers along with California Steel
Industries Inc., Fontana, Calif.
cutting anything back. The two companies have committed to
supplying our full needs," the spokesman said. "Were at
In fact, he said, UPI
expects to ship more than 1 million tons of steel in 2014, more
than last year. Its products include hot-rolled pickled and
oiled, cold-rolled and galvanized sheet, as well as tin mill
disclose the formula on which it purchases bands from its
owners, but outsiders believe it may be based in part on the
CRU Group index, which at recent levels could make it difficult
for Pittsburgh-based U.S. Steel to ship bands from Fairfield,
Ala., Granite City, Ill., and Gary, Ind., to the West Coast for
conversion on an economic basis.
up to the plate," the spokesman said about UPIs Korean
partner assuming a larger supply role. "We have shipments
coming in every single month."
Meanwhile, for steel
buyers who require a domestically melted band due to Buy
America requirements, UPI has begun charging a $45-per-ton
premium for the material.
"The customer has to
make a decision" if it needs domestic-melt material, the
company spokesman said.
Some outsiders think
this policy has pushed galvanized business in particular to
other millsand helped spur speculation that UPI is
retreating, especially in this product. But the spokesman said
the West Coast mill is enjoying strong galvanized business,
noting that UPI was expecting this week to close out its March
order book for galvanized. Output has been estimated by market
sources at more than 30,000 tons per month.
contracts with its owners allow it to procure third-party
bands, the spokesman noted. It has converted bands from certain
outside mills, whose identity it declines to disclose, on a
Finding a major source
of third-party bands in todays environment is seen by
market sources as challenging, with little domestic
availability. Moreover, in order for UPI to realize its optimum
efficiency, it needs large coils of around 60,000 pounds rated
at 1,100 to 1,200 pounds per square inch of width.