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Steel plate price hikes draw line in sand

Keywords: Tags  steel plate, Nucor, ArcelorMittal, SSAB, anne riley

NEW YORK — Steel plate mills’ push to raise tags has not yet translated into higher transaction prices for most buyers, but the move has helped keep domestic tags from softening further, market sources told AMM.

"I didn’t see the market number move at all. The (increase announcements) were more to try to solidify prices," a source at one carbon plate distributor said.

A plate processor source agreed, noting that prices have seen little movement in the weeks since the announcements. "Everyone is making these price announcements, and everyone is waiting to see if they stick," he said.

Nucor Corp. said last month it was raising net transaction prices by a minimum of $40 per ton ($2 per hundredweight) for all new orders of heat-treated, quenched and tempered, normalized and as-rolled carbon plate (AMM, March 23). SSAB Americas quickly joined in, announcing its own plans to raise transaction prices by a minimum of $40 per ton effective with orders scheduled to ship the week of April 29 (AMM, March 26). ArcelorMittal USA Inc. did not put out a letter raising prices, sources said, but it has "followed suit verbally," the distributor source said.

But despite talk of increases, the majority of spot sales are still taking place in the $930- to $940-per-ton range that was reported throughout much of the first quarter, sources said. The stable pricing trend was confirmed by SteelBenchmarker’s April 9 report, released Wednesday, which pegged standard plate at $936 per ton.

Market sources said that at least one mill with a healthy backlog was still able to achieve pricing above that range, even as others were said to be a bit more aggressive saleswise.

"There’s room to negotiate on just about anything right now. The mills are trying to get these increases through, but if you say ‘I have this big, juicy order’ they’re going to bend," the plate processor source said.

The distributor source agreed. "I think $47 (per cwt) is a fair number, but there are some buys that can be made below that," he said.

While prices have not shot up as a result of the announced hikes, they also have not lost any more ground, despite falling scrap prices and strong import volumes. Last week, AMM lowered its consumer buying price for automotive shredded scrap in the Chicago market—the basis for some mills’ raw material surcharges—by $10 per ton (AMM, April 6). "With scrap prices going down, iron ore prices going down, nickel going down, copper going down, their input costs going down, the question is, what’s going on?" the processor source said.

A second distributor source said the plate market was confused. "Scrap prices are confusing, mill increases are confusing; they’re confusing me. It used to be where scrap dictated one way or another (where steel products would go). I don’t think it matters much anymore," he said.

Also overshadowing the market are plate imports, which have been stable in recent months but could rise if domestic price hikes prove successful, sources said.

"There’s been so much talk of pricing going the other way because of imports in the market and more that are going to hit late this month or next into the Gulf (of Mexico states). There are definitely some signs that are contradictory," the first distributor source said.

Meanwhile, domestic plate demand is holding fairly steady, sources said, citing a slight pullback in recent weeks but an overall stable trend.

"Business was really good in February; March was again strong. I think the price announcements kind of put some people on the sidelines, not buying steel, as they wait and see what’s going to happen," the first distributor source said. "Demand is out there, (but) it has slowed the last week or two."

The second distributor source agreed. "Things are steady, we’re moving along, but no one is going crazy."

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