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Steel plate market sees glimmers of hope

Keywords: Tags  steel plate, carbon plate, commodity-grade plate, steel service centers, steel plate mill, Chris Prentice

NEW YORK — Spot buying of carbon steel plate products has resumed in the first full week of the new year and some sources say they are seeing signs of end-use demand returning to the market, although the increased activity has not translated to higher prices from domestic mills.

"We’re picking up steam," a source at one southern plate distributor said, citing an improvement in order rates since lows in December and a quiet start in the first few days of 2013. "I’m feeling reasonably encouraged."

End-use demand for steel plate products slowed sharply in December, but distributors and fabricators said they are now seeing glimmers of hope in their order levels.

"We’re seeing good bookings," a Midwest plate processor source said, noting that fabrication activity was strong.

Still, sources said the increased activity has not yet translated into longer lead times at the mills, which is seen by many as an indicator of real demand. Lad times are said to be as short as three to four weeks for basic, commodity-grade products, according to steel buyers.

Short lead times, on-the-ground inventories at mills and a lack of certainty about end-user demand levels going forward have kept many distributors from moving quickly to restock, despite the apparent uptick, sources said. The hesitation has spurred some concessions from the higher offers mills had been quoting since announcing two rounds of price increases at the tail-end of 2012.

Previously, mills were said to be quoting as high as $40 per hundredweight ($800 per ton) f.o.b. Midwest mill for discrete carbon plate, but steel buyers reported many mills had backed off those levels for most bookings, leaving transaction levels at an average price of $37 per cwt ($740 per ton).

"We’ve seen a little movement on domestic pricing downward," a Midwest service center source told AMM, noting that the "concessions" had encouraged him to jump back in to restock.

Still, many service centers said they are continuing to hold off building inventory, instead placing small-tonnage buys based on their order levels.

"We’re keeping the inventories close," the southern distributor source said.

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