Prices for US plate were steady last week, just when North American producers were announcing a fresh round of price increases.
Fastmarkets’ weekly price assessment for steel cut-to-length plate carbon grade, fob mill US was at $26 per hundredweight ($520 per short ton) on Friday September 11, unchanged from the previous week but down by 18.8% from $32 per cwt at the start of this year. At least four North American steel producers announced price increases during the late stages of the assessment week.
The price adjustments were led by Nucor Corp, which set a minimum delivered price of $29.50 per cwt on Wednesday. The new target price would represent a $1.50-per-cwt increase from the company’s previous minimum delivered price of $28 per cwt.
*** SSAB Americas and Algoma Steel
The next day, SSAB Americas and Algoma Steel issued letters notifying customers that they were increasing US plate prices by at least $40 per ton. ArcelorMittal USA did not issue a letter, but by Friday also started quoting prices that were $40 per cwt higher, according to market participants.
On Friday, the day of the assessment, a source at one plate mill confirmed the higher quotes on new plate inquiries. But this source did not confirm any immediate sales at the sector’s newly published level with a $30-40 per ton increase. “I don’t think it’s being supported widely, so I’m hesitant to order,” an East Coast distributor source said. There is “no demand at all. I think all mills are just trying to get an increase and seeing if it sticks. Only one says they are busy.”
In the latest assessment, data was received in a range of about $25-32 per cwt. The lowest end of the range represented transactions occurring before last week’s increases were implemented. Inputs above $30 per cwt represented post-increase mill offers that were not yet confirmed in purchase orders. Lead times were reported mostly around five weeks.
One West Coast distributor source said the price increase was not being charged in his region, and freight equalization continued to be common even for the longest-distance shipments. Due to competition from mills in the eastern US, Evraz North America did not issue a letter or try to quote higher, the same distributor source said.
*** Scrap prices
Fastmarkets’ plate price assessment descended to an almost four-year low of $25 per cwt in August before recovering to $26 per cwt, where it has been since August 28. The next catalyst might be found on the cost side, with ferrous scrap prices expected to strengthen further in October trade. “With a final scrap announcement coming, that could cause another bump,” the West Coast distributor said. Multiple buyers said the plate price increase eventually could be successful in part, but the hikes might be short-lived unless the US energy market improves.
*** Price hikes
The latest mill price hikes did not trigger any rush to restock and, in fact, caused some service centers to freeze their inventory purchasing, according to the East Coast distributor. Buyers want to ensure that they are not paying too much now in relation to resale prices later, according to one trading source, who agreed that the mills might succeed in getting plate prices to tick up a bit – but not by a lot. “We’re trying to thread the needle between where our inventory is and what is publicly announced” on mill pricing, the same trader said. “We all need demand to improve. We need oil prices to improve.”
Without a recovery in end usage applications – such as oil and gas, rail car production or public infrastructure – mills will struggle to win the full extent of the latest plate increase merely by citing higher scrap costs and soaring prices of other flat-rolled steel items. “It remains to be seen whether [the increases] will stick,” the trader source said. “Supply-induced price increases are usually not sustainable. If there were demand and our phones are ringing off the hook, there would be a demand-based increase.”
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