NEW YORK At least two major steel mills have raised spot prices on carbon and alloy plate products in an effort to halt a softening market, sources told AMM.
Lisle, Ill.-based SSAB Americas has increased its base prices for non-contract carbon and alloy steel plate products by a minimum of $30 per ton, according to a Feb. 18 letter to customers. The price hike, effective with March 17 shipments, applies to as-rolled carbon and high-strength low-alloy plate; normalized plate; alloy plate, including quenched and tempered; cut-to-length plate less than 72 inches wide; and hot-rolled coils less than 72 inches wide.
Charlotte, N.C.-based Nucor Corp. followed the move, increasing carbon, alloy and heat-treated plate prices by $30 per ton for all new orders effective immediately, according to a letter sent to customers late Feb. 19.
While the move seems to point to a strengthening in order books, market participants questioned the fundamentals behind such an increase. Other mills were expected to follow, they added.
"Apparently, theyve (SSAB) got strong booking weeks and have a three-week planned outage. I guess theyre taking the opportunity to raise prices," one Midwest buyer said. "They want to take it to the bank. But there is still a lot of (excess plate) inventory sitting around."
The domestic plate market continues to face downward pressure as buyers remain wary of quiet end markets, market participants said last week (amm.com, Feb. 15).
SSABs planned outage at its Montpelier, Iowa, mill at the end of March and early April will last approximately eight to 15 days, a company spokeswoman said.
Market participants noted that this outage could potentially lead to more support for a price increase, but excess inventory remains an issue in the plate market.
"Theres all this glut of material and no one is buying anything," a second Midwest buyer said. "People are still going to buy when they absolutely need (it) until business conditions get better, of course. Why would you beef up your inventory without knowing whats going to happen?"
But SSABs plate hike wont be enough for the market to gain traction on the import front, traders said. The market for imported plate has been marked by pricing offers that are not competitive in the U.S. market, particularly as demand remains lackluster.
"The problem is that all the foreign mills have been trying to raise prices at the same time. It looks like all the buyers worldwide are waiting and trying to resist price increases," one trader said. "Theres still too much steel. All these price increases are efforts by domestic mills to stop the bleeding and stabilize the markets. Its got nothing to do with market fundamentals like extended lead times or uptick in demand. Imports are very tough right now."
While its too early to know if prices will stick, lackluster demand will keep buyers hesitant about placing new orders, buyers said.
"We want it to stick. We want our inventory value to increase," the first buyer said. "But, again, there has to be some reason for it to stick, and quite honestly I dont think the demand is there. Things (prices) come and go. Its the proverbial roller coaster."