US plate prices were unchanged for the third week in a row, with sources disagreeing on whether the market has plateaued or reached a bottom.
***Plate price
Fastmarkets’ weekly assessment for steel cut-to-length plate carbon grade, fob mill US was flat at $26 per hundredweight ($520 per short ton) on Friday July 24, unchanged since July 6. The price is down 26.8% from one year ago and is at its lowest level since 2016.
“Plate has hit a bottom,” a Southern distributor said. “Prices have been a little more firm in the last two to three weeks. I don’t think they’re going a whole lot lower – I don’t think they can.”
Others, however, were not convinced that the market might see an upswing soon.
“Would it be nice to have plate go up? Yes, because it helps inventory values and margins, but I don’t see it,” a Midwestern distributor said. “Mills don’t want to go below where they are, and service centers are not going to pay more than where things are. Service centers are only buying what they need when they need it, trying to whittle down inventory, and no one is optimistic.”
“Plate prices remain flat,” a second Southern distributor said. “There is still no increase in demand, so no real opportunity to negotiate. Most of the distribution centers have plenty of inventory to go around, we all just need orders to come in.”
Lead times were stable in a range of three to five weeks, according to sources.
“Our activity in the market this week was minimal,” a Southern buyer said. “We haven’t really seen lead times push out consistently either.”
***HRC-plate spread
Sources did not agree on the significance of the spread between domestic plate and hot-rolled coil prices.
Fastmarkets’ steel hot-rolled coil index, fob mill US was calculated at $22.02 per cwt on July 24, up 0.3% from $21.95 per cwt a day earlier but down 3.8% from $22.90 per cwt on July 17.
The spread between the two prices stood at $3.98 per cwt on July 24, up 49.1% from $2.67 per cwt a month ago but down 35% from $6.12 per cwt a year ago. The spread reached as high as $15.02 per cwt on January 25, 2019.
“Throw that spread out the window,” the Midwestern distributor said. “Back in the day, there was a pretty good correlation, but it doesn’t matter anymore. HRC is a lot of consumer spending and plate is more [capital expenditure] and government spending.”
“It’s a legitimate spread to continue to monitor,” the first Southern distributor said. “We have customers that buy both HRC and plate, and they have the option to use either depending on the price. When those prices get to certain levels, the customers convert to wide coil or plate, so then demand for plate starts to pick up.”
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