NEW YORK Price quotes for new plate orders have bumped up over the past week following a recent round of increase announcements, but transaction tags have failed to rise in tandem, market sources said.
"The quotes are higher, but there are still old prices coming out of the market," one mill source told AMM.
Last weeks price increase announcements from major domestic plate producers (amm.com, Nov. 9) prompted restocking orders from some service centers, although the increased ordering was far from across the board.
"We got some orders at the lower numbers," on service center source said.
The increase in orders was triggered by distributors looking to restock rather than a rise in end-user demand, sources said.
A second service center source said that at least some mill sales representatives had said that he could continue to book at the old numbers if he ordered immediately following the announcements. "They said if I waited, Id have to pay the $50 (per ton) up," he said.
But the buying wasnt universal. For service centers looking to keep inventories lean, the belief that the market might be at a floor on pricing failed to prompt buying.
"Were not doing any restocking at this point," a third distributor said. "We just dont see demand strong enough to go out and replenish. Our plate business continues to be the weakest product we have right now. ... Were pretty comfortable with our (inventory) levels right now and, frankly, on all products."
While the price announcements have helped stabilize prices over the past two weeks, it remains to be seen whether the increases will stick, sources agreed. The price of cut-to-length carbon plate held steady this past week at $34 per hundredweight ($680 per ton) f.o.b. Midwest mill, although quotes were reported at $36 per cwt ($720 per ton).
"Itll take time," the mill source said, pointing to the declining price spread between domestic and imported A36, commodity-grade material.
The additional ordering has helped increase lead times slightly at some mills, but it would take a longer backlog to create a sense that demand was picking up, all agreed.
That demand will ultimately be the key to pricing support.
"If business activity increases, then yes," the first service center source said when asked if higher prices will hold. But "theres nothing really supportive" in the meantime, he said, citing current overcapacity and decreased demand.