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SSAB shakes up plate market with 2d hike

Keywords: Tags  steel plate, carbon plate, cut-to-length carbon plate, SSAB, SSAB Americas, Lisle, Ill., quenched and tempered high-strength


NEW YORK — A move by SSAB Americas to increase published plate prices by another $50 per ton was met with mixed reactions from the market, with many taking a wait-and-see approach on whether a full $100-per-ton increase can be supported by existing plate demand.

The Lisle, Ill.-based subsidiary of Swedish steelmaker SSAB AB has raised prices for all new and existing non-contract orders set to ship the week of Dec. 30, according to a customer letter dated Nov. 19 (amm.com, Nov. 20). The increase applies to as-rolled carbon and high-strength, low-alloy plate; normalized plate; alloy plate, including quenched and tempered; cut-to-length plate; and hot-rolled coil greater than 72 inches wide, the company said.

Earlier this month, the plate producer followed competitors Nucor Corp. and ArcelorMittal USA Inc. in raising prices by a minimum of $50 per ton (amm.com, Nov. 9), meaning SSAB America’s combined increases total $100 per ton.

But whether the announcement will translate to a full $100-per-ton increase in transaction prices remains to be seen, sources said.

"The easy part is to announce price increases. Making them stick is another matter," one service center source told AMM.

"Everyone is pretty guarded to see whether the market will continue to strengthen," one mill source agreed.

A number of steel buyers said they had anticipated the fourth-quarter increases. "This is the strategy this time of year. It’s a good way to firm prices," a second service center source said.

But the majority of market sources told AMM they were caught off guard by how quickly the second increase followed on the heels of the first, with reactions ranging from "surprising" to "aggressive."

"I think it’s not justified, and demand doesn’t support it," a third service center source said.

Pricing for plate products—particularly commodity-grade products—has taken a dive in recent months amid a decline in demand that started in the second quarter of this year. The price of cut-to-length carbon plate, for example, has dropped as low as $34 per hundredweight ($680 per ton) f.o.b. Midwest mill in recent weeks, down from a high of $47 per cwt ($940 per ton) in January.
But others said the increases could have legs, especially since some mill sources said they started to see an uptick in orders as many steel buyers perceived recent lows as the pricing floor.

"We do see a little activity because some people are low on stocks," a second mill source said. "Some customers took positions at very low levels, and their perception is that if they need material—if not in December, at least in January—they found it opportune to buy at those levels a week or so back."

The first round of increases also prompted an extension of lead times at some mills.

"It’s our view that on the first $50 per ton, at least $20 will get secured," the second mill source said.

As of late Tuesday, AMM had not seen news of other mills following SSAB America’s apparently leading move, but some said they expected other mills were close behind.

"I assume others will follow suit," a fourth service center source said.


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