NEW YORK Citing plentiful
supply and weak demand, U.S. buyers of steel plate say the
market is facing downward pressure and could see prices soften
in the weeks ahead.
Buyers had said earlier this
month that market conditions looked promising, with many
consumers contending a typical January uptick was just around
the corner (
amm.com, Jan. 10). However, that expected pickup
appears to have stalled due to oversupply at domestic mills,
"The mills look as if they have
good amounts of inventory on the ground. I dont think the
market is very strong. And things are softening," a Midwest
service center source said. "Theres so much capacity in
the market right now, especially on the coil side."
A mill source who had
anticipated the usual seasonal uptick in January agreed that a
turnaround remains to be seen. "We expected a little spark in
the first quarter, but we dont see it at all. Inquiry
levels are quite dead, even after we perceive it to be a good
price," he said. "There seems to be a standstill in the
Domestic mills are said to be
still quoting at around $38 per hundredweight ($760 per ton)
for discrete carbon plate in the Midwest and Southeast.
However, the majority of market players said that $37 per cwt
($740 per ton) f.o.b. Midwest mill is the average buying price,
and some said they expect that price to fall further if current
oversupply conditions persist.
"Weve seen some stock
priced attractively, but it looks like most of the stuff
weve needed, the mills have on the floor. This means that
lead times are shortened and discounts are to be had because
the mills are hungry for work," a fabricator source said.
In the South, transacted plate
prices are even softer, sources said, citing sales as low as
$35 per cwt ($700 per ton) due to competitive imports, which
market participants pegged at $35.50 to $36.50 per cwt ($710 to
$730 per ton) for medium plate via the Port of Houston.
With domestic plate
pricesparticularly in the Southon par with import
offers, foreign steel is gaining little traction, traders said.
Some 49,155 tonnes of cut-to-length plate were poised to hit
U.S. shores in December, down 19.9 percent from Novembers
final figure of 61,350 tonnes and 28.2 percent lower than a
year earlier, according to license data from the U.S. Commerce
Departments Import Administration.
On the other hand, imports of
plate in coil were expected to total 121,948 tonnes in
December, down just 1.3 percent from Novembers final
figure of 123,541 tonnes and up 67.2 percent from December 2011
largely due to a year-over-year jump in imports from
"On the import end, the really
cheap steel is now out of the market. I know some of the mills
are desperate to gain market share because the markets are so
slow," one trader said. "Plate is very stable right now, but
the spot market is weak because domestic lead times are almost
nothing. Things are very fragile right now."
Buyers said they are expecting a
few shipments of European plate in coming weeks that was booked
last year at prices around $34 to $35 per cwt ($680 to $700 per
ton). However, most buyers have hesitated to take the plunge on
more imports due to lackluster market conditions and domestic
"We havent bought any
imports (recently) because the pricing isnt attractive
enough. In particular, were seeing pricing from some
large mills very cheap in the market," a southern service
center source said. "Things are slow, really slow. Before the
end of last year, half of our customers were busy and half
werent. Now, one-third of our customers are busy and
two-thirds arent. Its disconcerting. I think this
has to do a lot with the confidence in the economy and the
Rumors of a price increase have
circulated in the steel sheet and plate markets in recent
weeks, but plate customers maintain that a price increase is
unlikely to be effective, considering the large volumes of
"I heard recently that the mills
are looking for a price increase. Based on whats happened
in the market, Im not sure what will happen," a second
Midwest service center source said. "I dont think right
now a price increase would really do anything. Its not
going to spur on anyone to place more tons. And you can get
product in less than three weeks. I dont see the lead
time numbers moving anytime soon."