Steel Mills

USS/POSCO Raises Steel Prices by $150 Per Ton

Written by John Packard

In a letter to their customers, West Coast flat rolled conversion mill USS/POSCO announced a $150 per ton ($7.50/cwt) price increase on hot rolled pickled & oiled, cold rolled and galvanized steel. The price announcement is effective immediately as the mill has now opened their August order book.

West Coast buyers explained to Steel Market Update that USS/POSCO (also referred to as UPI), a joint venture mill between US Steel and POSCO out of Korea, had been under-priced in comparison to their competition. The new price increase puts their base price levels in the low $40’s per hundredweight ($800+ per ton) which is more in line with where California Steel Industries is expected to be.

It is also more in line with the steel mills located east of the Rocky Mountains who recently took their cold rolled and coated base price levels to $800 per ton and higher.

As we researched the West Coast market we learned that the Midwest mills have been staying east of the Rockies and there is limited foreign steel competition for any of the West Coast steel mills (UPI, SteelScape and California Steel Industries). The lack of competition should help the mill to collect most, if not all of the announced price increase.

We also learned from an industry source on the West Coast that UPI has had production issues which has cut their output by twenty-five to thirty percent over the past several weeks.

We will watch to see how quickly UPI is able to sell out their production for the month of August.

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