LOS ANGELES West Coast carbon steel plate buyers are viewing the latest move to boost domestic prices with skepticism in light of continuing heavy service center inventories as well as a lack of a pickup in demand outside certain energy pockets.
"I know theyre trying to shore up prices, and I hope they can do it," a distributor source said of Lisle, Ill.-based steelmaker SSAB Americas move to hike plate prices by $30 per ton effective March 17. "But theyre raising prices at the same time people in our business are selling steel on the resale market at prices that arent much better than mill replacement cost."
A source at an equipment manufacturer whose own energy-related business is picking up sharply after a flat period late last year stopped short of predicting the increase will fail, although hes not yet convinced its on solid ground. He noted that service centers competing for business "have a lot of material now," and there doesnt appear to be strong demand on the West Coast, in particular, outside his own energy accounts.
Delivered prices to the West Coast market from domestic mills are reported in a range of $780 to $800 per ton ($39 to $40 per hundredweight) for larger service centers. Recent reported offers on foreign plate in a range of $740 to $760 per ton ($37 to $38 per cwt) for May delivery arent particularly attractive because few buyers are willing to bet that the domestic market wont be even lower by the time the material arrives. Moreover, previously purchased imports already in warehouses are helping to drive down the average value of service center inventories.
A number of market sources appear to agree with their counterparts east of the Rockies that SSAB might view a planned three-week maintenance outage at its Montpelier, Iowa, mill as a good time to announce a hike. One buyer had the impression that plate mills in general are using the market slump as an excuse for temporary maintenance cutbacks.