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
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
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.