NEW YORK Steel plate prices have retreated from their 2013 highs in recent days as a combination of lower scrap prices and difficult end-market business has caused some downward pressure, sources said.
Prices had firmed slightly in recent months as mills successfully held on to part of the $60-per-ton increases implemented earlier this year (amm.com, April 5), but that strength has started to dissipate, sources told AMM.
Spot cut-to-length carbon steel plate sales were reported this past week at an average price of $36.50 per cwt ($730 per ton) f.o.b. Midwest mill, down from the $37-per-cwt ($740-per-ton) range reported since early April, with some buyers and sellers reporting larger-tonnage deals as low as $36 per cwt ($720 per ton). Prices in the South were reported even lower, with most spot sales there taking place in the $35.50- to $36-per-cwt ($710- to $720-per-ton) range.
The softening prices come at a time when the plate resale business has been hard hit as too many sellers chase the same volume of orders, sources said. As a result, distributors say they cant compete without demanding lower prices at the mill level.
"Mills dont make a public announcement on decreases, but they do on increases. We had our (purchase prices from the mills) drop about $1 (per cwt)," one Midwest service center source said. "Theres no demand from service centers, and I wasnt passing on any of the increases."
At the same time, scrap prices fell about $20 per gross ton across the Midwest in May, stymieing the plate markets potential upside, sources said.
"With the successive degrees of falling scrap prices month over monthyou take it two months or so, (there has been a) $40 fall in scrapit has a huge implication on the finished side," one mill source said. "I think this $20 (easing in some mills plate prices) is coinciding with scrap going down $20 this month."
Meanwhile, market players report little change in end-use demand and continued razor-thin margins.
"Our inquiry levels are good, but orders are getting tough to come by," a second Midwest service center said. "Its been a quiet second quarter. For the most part, its not a good situation."
A second mill source agreed that demand is steady but that concerns remain.
"In relative terms, the plate market has been pretty good. Right now, though, pricing is pretty fragile because theres been some renewed offers for imports coming in," he said. "In general, quarter-two demand is a little iffy. Demand is stable but on the soft end of stable. Were not seeing any big collapse in plate demand, but theres certainly no rally."