NEW YORK Lead times at some domestic plate mills could start to come in now that planned spring outages at a number of facilities have concluded, sources said, noting that any significant lead time reduction could begin to put downward pressure on the recently stable steel plate market.
Planned maintenance outages at several plate mills, including SSAB Americas outage in Montpelier, Iowa, were one major factor lending strength to first-quarter plate price hikes, sources said. Since March, Lisle, Ill.-based SSAB, Charlotte, N.C.-based Nucor Corp. and Chicago-based ArcelorMittal USA LLC have all pushed up published plate prices by $60 per ton (amm.com, March 8).
As a result, AMMs published spot price rose to $37 per hundredweight ($740 per ton) f.o.b. Midwest mill in early April and have held steady in the weeks since.
But since most major mills have now concluded their recent outages, some market sources said continued pricing strength in the plate sector will largely depend on whether producers can keep the four- to six-week lead times reported during the outages.
"To figure out whats going to happen with plate, all you have to do is look at the flat-rolled guys trying to jack prices up since last year with no success. While the plate market isnt as saturated and doesnt have as much overcapacity as coil, if lead times fall to two to three weeks theres no way in hell theyll hold the increase," a Midwest service center source told AMM.
A few service center sources have reported that lead times at at least one plate mill have already started to soften, with some product being shipped as much as two to three weeks ahead of schedule.
"When lead times are short, thats an indicator that mills arent full and that gives customers more leave not to book immediately," a mill source said. "For us, pricing is under pressure and so is demand. Im now hearing that certain mills are shipping ahead of promised weeks."
Another factor that could contribute to softer mill pricing is the difficulty that service centers have had pushing higher prices through to end users.
"Plate is pretty stagnant right now. The prices came up a little bit, but theres still a lot of cheap resellers out there," a southern service center source said. "My business isnt good, but Id call it tentative. People are still scrambling to sell what they can."
The Midwest service center source agreed, noting that while there are only a number of domestic plate mills, service center customers are plentiful. "We try to get what we can, but competition sets the limit for how high you can go," he said.
With minimal imports, a brighter outlook for the spring construction season and continued strength in the heavy transportation sector, some say the plate market is actually looking fairly strong even with the outages coming to an end. "Things have pretty much stabilized. I dont see any tremendous growth or tremendous erosion in the marketplace in the near term," a second Midwest service center source said.