Steel Products

Final Thoughts

January 28, 2013

On Thursday I attended the American Institute for International Steel (AIIS) West Coast Dinner in Long Beach, California. Many thanks to David Phelps, president of the AIIS and his West Coast team who did a great job with the dinner and the program.

A couple of quick notes to share with our readers, Marcel Van Dijk spoke on behalf of The Port of Los Angeles. He mentioned that the ships are coming in “pretty full” today compared to the small loads of 2009. The port handles a lot of slabs and coils. The slabs are for California Steel and the coils for a wide range of customers throughout Southern California.

Marcel spoke of growth in the construction markets in Southern California especially in E-Commerce warehouse construction. There is approximately 13.0 million square feet of warehouse under construction which he believes will add 7-9 percent to the total imports of steel at the Port of LA.

There was much discussion regarding the labor agreements – which deserve special attention and SMU will do so in a separate article later this week.

On a side note – conversations with a number of the traders at the dinner found the prices on the West Coast tend to be controlled in a similar way as those on the East Coast – the ability (willingness) of service centers to raise prices to their customers. If service centers are unable, unwilling or too stubborn to raise prices then price increases tend to die on the vine.

This will be an interesting week to see if the mill sales people are given marching orders to “hold the line” on price increases or if there is “wiggle” room. From my conversations with big buyers last week they did not expect to pay all of the price increase up front and negotiation should be in play.

As always your business is truly appreciated.