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Steel plate market sees brighter future ahead

Keywords: Tags  plate, steel, steel buyers, SSAB, Nucor, ArcelorMittal, plate prices, Catherine Ngai

NEW YORK — Steel plate prices look poised for near-term gains after at least two mills raised tags $30 per ton amid increased market activity and higher raw material costs.

Nucor Corp., Charlotte, N.C., has increased base prices by a minimum of $30 per ton on all new orders for carbon, alloy and heat-treated plate effective immediately, according to a March 8 letter to customers.

SSAB Americas also said it was raising its base prices by a minimum of $30 per ton for all noncontract as-rolled carbon and high-strength low-alloy plate, normalized plate, alloy plate including nonbranded quenched and tempered, cut-to-length plate greater than 72 inches wide and hot-rolled coil greater than 72 inches wide. The Lisle, Ill.-based company’s increase is for all new and existing orders acknowledged for shipment the week of April 14, it said in a letter to customers March 8.

Buyers have said in recent weeks that depressed demand and slow end markets had put downward pressure on transacted prices (, Feb. 22). But activity seems to have solidified in the past week, sources told AMM, causing renewed strength in the market.

"We’ve had a stronger order book for the last month and a half. Order entries have improved. My understanding is that no one has March rolling space anymore," one mill source said. "We’re still a little cautious and we recognize that it’s a fragile market ... but there are definite signs that things are slowly turning around."

While neither of the companies gave a reason for the increases, they are in line with earlier $30-per-ton increases by both mills of (, Feb. 19).

While ArcelorMittal USA LLC followed the original increases, it instead hiked prices by $60 per ton for April deliveries, which sources said would mean that Nucor and SSAB would follow (, Feb. 22).

While transaction prices this past week had yet to move up and remained steady at $35.50 per hundredweight ($710 per ton) f.o.b. Midwest mill, market participants said a turnaround was expected.

"Things really turned around this last week," one Midwest buyer said. "Lead times have extended somewhat, and I think it’s because of some planned outages."

The turnaround could be attributable to a seasonal uptick, some said, particularly those tied to the construction market. The increased activity, combined with recent rising scrap costs for March, could give a much needed boost to the market.

"We’re in the last month of the first quarter," the first Midwest buyer added. "The winter, hopefully, is behind us and things tend to get busier when the weather gets better."

Others said surplus inventories at domestic plate depots have "dried up" in the last couple of weeks.

But some remain skeptical of any upward movement, saying it could be too early to tell if the recent price increases will stick.

However, they added that mills have been more disciplined in keeping quotes higher, even if business activity hasn’t shown much improvement.

"Some of the quotes that came in were slightly higher," a second Midwest buyer said. "They’re trying to put the increases through, but they haven’t had the bookings yet to support the increase."

In the South, foreign plate inventory that arrived in the fourth quarter is still being consumed, sources said. As a result, it has put additional pressure on plate.

Some 86,887 tonnes of cut-to-length plate were licensed for import in February, according to data from the U.S. Commerce Department’s Import Administration. That’s almost double the 44,723 tonnes that arrived in January, although traders said that little commodity plate is available on the spot market as a result of depressed U.S. prices.

"(In the South) things are alright, but they’re still in limbo," a second mill source said. "There’s still a bit of imported inventory on the ground (there)."

But a brighter outlook could be ahead, some sources said.

"Things will pick up if construction picks up," the first buyer said. "I’ve been busy, which is good, but like everyone else we’re fighting for orders. Margins just aren’t where we want them to be."

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