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Reliance exec favors plate price hikes

Keywords: Tags  carbon steel plate, plate pricing, Reliance Steel & Aluminum, Gregg Mollins, nonresidential construction, SSAB America, Nucor, ArcelorMittal Corinna Petry


CHICAGO — Reliance Steel & Aluminum Co.’s carbon steel plate shipment volumes have held steady, but falling prices hurt margins last year and still haven’t recovered, and the service center chain’s chief operating officer hopes that buyers accept the most recent increase attempt.

"Our volumes on plate are reasonable. They’re not at peak, (but) we’ve certainly seen them worse than this, by quite a bit. So we’re really not complaining about the volumes," president and chief operating officer Gregg J. Mollins said during the Los Angeles-based company’s Feb. 21 conference call.

"But the margins we have on plate, we are complaining about. Prices went down by over $200 a ton in plate last year. That’s hard to absorb. It has hit our margins in a negative way, and it’s a hell of a lot of ground to make up," he said.

SSAB Americas and Nucor Corp. both announced Feb. 18 a $30-per-ton increase on plate (amm.com, Feb. 19), "which we certainly hope will hold," Mollins said. ArcelorMittal USA LLC later said it would increase transaction prices on all plate products by $60 per ton (amm.com, Feb. 22).

Some of last year’s falling prices can be attributed to import volumes, Mollins said. "Imports can always be a problem. They kind of drive us crazy, actually. But it is what it is."

However, if nonresidential construction activity starts to improve in the United States as expected by the second half of 2013, "that’s going to have a big influence on demand for plate," he said. "If demand improves, I think pricing would certainly improve with it. If we had the construction volumes that we had back in 2006 to 2007, (that) affects not only beams and mini-mill products (merchant bar and reinforcing steel), it (also) affects carbon steel plate."

Mollins said prices on all construction steel products likely would rise if demand pushes domestic mills’ average capacity utilization rate above 80 percent.


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