NEW YORK Nucor Corp. has increased transaction prices by a minimum of $30 per ton for its plate products in an apparent leading move after sources said the previous round of hikes effectively fizzled out.
The higher prices for all new orders for carbon, alloy and heat-treated plate are effective immediately, Nucor said in a July 11 letter to customers.
ArcelorMittal USA LLC and SSAB Americas issued separate announcements later in the day that they also were raising plate transaction prices by a minimum of $30 per ton.
Charlotte, N.C.-based Nucor did not provide a reason for the increase, but market players said it appeared to be a way to get prices back off the floor after mills were forced to give back at least a portion of an earlier increase.
Earlier this year, domestic plate mills were partially successful in lifting plate tags as part of an announced $60-per-ton increase, but prices began to soften again in late spring after hitting a high of $37 per hundredweight ($740 per ton) f.o.b. Midwest mill in early April (amm.com, June 7). AMMs plate price remained steady this past week at $35 per cwt ($700 per ton) f.o.b. Midwest mill, although tonnages at around $34.50 per cwt ($690 per ton) were possible in parts of the South, sources said.
With prices having lost their earlier momentum, some sources said they werent optimistic the increases would stick.
"There hasnt been any significant uptick on the plate side of things to warrant them coming across with a price increase," a Midwest buyer said. "I dont understand how they can arbitrarily raise prices."
But others said higher raw material costs in July along with stronger steel sheet prices were two factors lending support to the domestic plate market.
AMMs Midwest Ferrous Scrap Index for shred settled up 5.4 percent this week at $381.06 per gross ton vs. $361.38 last month, while AMMs Midwest Ferrous Scrap Index for No. 1 busheling settled at $410.74 per ton, up 8.8 percent from $377.37 in the same comparison (amm.com, July 10).
"It makes sense that this increase could be encouraged by scrap moving up," said a source at a U.S. plate mill. "However, there are no indicators for us that anything different is going to happen in the market demandwise in the coming weeks. Lead times for us are still two to three weeks. Of course, U.S. mills havent been reporting good quarterly results, which could give them financial pressure, too."
At the same time, the steel sheet market, which often moves in a similar direction as the plate market, has seen several weeks of steady climbs after three successful rounds of increases were sustained by supply-driven issues (amm.com, July 11). But plate players note that fundamentals in those markets are different.
"On the sheet side, there are a number of blast furnaces not working or planning to be down," a second Midwest buyer said. "The same dynamic isnt working for plate."
Meanwhile, imports have not made much of a dent in the U.S. plate market in recent months. Some 55,780 tonnes of cut-to-length plate was expected to hit U.S. shores in June, according to license data from the U.S. Commerce Departments Import Administration, the lowest figure since January and a far cry from the 102,056 tonnes imported in June 2012.
Another potential upside could be low inventory levels held by U.S. distributors, sources said. According to Metals Service Center Institute data, U.S. distributors held 947,000 tonnes of carbon plate in May, down from nearly 1.1 million tonnes in the same month last year, although months of supply at current shipping rates was steady at 2.7 months.