NEW YORK U.S. plate tags have continued to soften on the back of increased foreign competition, shortened domestic lead times and uncertainty heading into the typically slower summer months, sources say.
After domestic mills partially succeeded in raising steel plate tags by some $60 per ton earlier this year, prices have slid back to where they were pre-increase, sources told AMM this past week.
"We had a small rally at the end of the first quarter, but if you look at the pricing, were really right back to where we were at the beginning," said one mill source. "Whatever blip there was, it was indeed just a blip."
Spot cut-to-length carbon steel plate sales were reported this past week at an average price of $35.50 per hundredweight ($710 per ton) f.o.b. Midwest mill, down from the prior weeks prices of $36 per cwt ($720 per ton).
Some pointed out one major change: an increase in offers for imported plate, particularly from Turkey, South Korea and Taiwan, which buyers said were in the $32- to $33-per-cwt ($640- to $660-per-ton) range delivered to the Port of Houston.
While plate imports were scarce in the first quarter due to a narrowed price gap between foreign and domestic steel, sources point out that the threat of lower-priced imports is putting downward pressure on domestic prices.
"Im not sure just how much plate has been booked for the summer, but having a customer see that (foreign) as an option hurts my prices," said a second mill source.
Some 114,141 tonnes of cut-to-length plate hit U.S. shores in April, marking an eight-month high, according to data from the Commerce Departments Import Administration. Meanwhile, some 104,260 tonnes of plate in coils also arrived in the same month, the highest figure in four months.
Lead times have also remained short, with market participants saying that three- and four-week lead times have continued to persist after stronger five- to six-week lead times reported earlier. Moving forward, some said that summerthe typical slowdown seasonwill present even softer demand and prices.
"Demand is stable, but theres not enough demand for the amount of supply in the marketplace. Things are still pretty soft. Usually, the slowdown is in July, and were right around the corner from July," said one Midwest distributor. "We never did see things pick up in the first and second quarter, so Im not optimistic that there will be any kind of turnaround in 2013."
And while plate tags continue to soften, some speculated that efforts to raise prices in the near term would unlikely be successful until fundamental changes occur.
"Right now, demand is bouncing along at the same levels, and we need to see signs that its strengthened, even just modestly," the first mill source added. "Its not bad, but its not good enough to warrant a price recovery, and the market badly needs a price increase."