The first flat-rolled steel price move for November on the West Coast has been posted as another producer's brief exit from the market ended this week.
USS-Posco Industries (UPI) told customers last week that it would raise prices on cold-rolled and galvanized sheet by $50 per ton effective with orders Aug. 26.
UPI's move is seen as relatively aggressive compared with its earlier October price hike of $30 per ton, although it hasn't surprised some buyers in light of equally bullish moves by some Midwestern mills.
Moreover, since the Pittsburg, Calif.-based producer at the end of last week still had availability left in October, the increase could arguably have been applied to some orders prior to November.
Meanwhile, the region's other major flat-rolled producer, California Steel Industries Inc. (CSI), which hasn't yet announced its November pricing policy, re cently turned heads by suspending new orders for a few days, according to market sources. It notified customers Aug. 27 that it was "temporarily suspending" October flat-rolled orders and shipments, but on Monday it told customers it would again accept and enter orders on Tuesday.
While CSI's announcements at the time didn't provide reasons for the suspension and subsequent resumption of order-taking, the company later said that due to extremely low inventory levels in the marketplace, orders had been coming in substantially outside "normal customer order parameters" in terms of both product and size.
CSI pointed out that when actual order entries don't match historical patterns it has to adjust its slab purchasing and mill schedules to "better match our customer requirements." Consequently, it analyzed its order book, made the "appropriate changes" and reopened its order book, it said.
"Basically, they took a ti me out," one market source said.
Another source said that a recent $60-per-ton price boost by ArcelorMittal USA Inc. and indications that other Midwest producers are sold out could have resulted in an influx of orders at CSI's Fontana, Calif., mill. CSI has told buyers it would raise prices in October by $30 per ton on hot-rolled sheet and $40 per ton on cold-rolled and galvanized, but hasn't yet announced its November pricing.
Imports still aren't much of a factor, although buyers think recent reports of falling prices in Asia could eventually lead to greater interest in the United States from Chinese and other offshore mills.
Amid the aggressive moves by domestic mills, few steel consumers report significant increases in their own business. Buyers noted that even when prices escalate beyond any improvement in end-market demand, there's still usually some measure of recovery on the consuming end.
"None of our major customers has anything good to say about their businesses," one distributor said.