Domestic mills have succeeded in boosting carbon steel plate
prices in the past week, but the outlook is still uncertain,
"From what I can tell,
it seems the increase is sticking at least in the short term,"
said one mill source. "A lot of projects came off the
sidelines, and we were pretty much at the bottom. I still think
the conversation in the market is that things arent so
robust that you can jam an increase through and move on.
Were watching the game closely."
In recent weeks, the
three largest U.S. plate millsNucor Corp., SSAB Americas
and ArcelorMittal USA LLCall hiked base prices on
discrete plate by $30 per ton. The move came after the last
round of increases effectively fizzled and plate prices took a
dive through the summer.
However, while demand
for plate has softened this summer, market participants say
that mills have generally remained united in their push for
"Plate (prices) have
been pretty firm, and the mills are holding the line and trying
to play ball," said one Northeast service center.
transactions last week were pegged at $720 per ton ($36 per
hundredweight), sources said, up from the previous weeks
prices of $700 per ton ($35 per cwt). This suggests the
realization of an approximate $20 per ton gain out of the $30
per ton increase.
traditionally keep domestic prices at bay, have had little
impact in the U.S. market this year. U.S. Census Bureau
preliminary data shows that in June, cut-to-length plate
imports totaled 64,449 tonnes, a far cry from 102,056 tonnes in
June 2012. License data through July 24 indicates some 41,002
tonnes of material will hit U.S. shores compared with 101,653
tonnes a year ago.
"Imports are not a
concern," said a second mill source. "Volume-wise things have
been no better or worse than where they have been in the last
few months. But one thing thats been quite evident at the
moment, import numbers are down."
The second quarter has
been particularly hard on the financial results of U.S. mills.
Earlier this month, SSAB Americas, a subsidiary of Swedish
steelmaker SSAB AB, posted a second-quarter loss on lackluster
demand, its first dip into the red in four years (
amm.com, July 19).
Other mills said,
however, that prices had increased due to factors ranging from
rising sheet prices to lean inventories at the distribution
level as well as unsustainably thin sales margins and not
due strictly to supply and demand dynamics. As a result,
distributors questioned whether the higher tags are
"Things are shaky. As
far as Im concerned, the mills got maybe half of the
increase," said one Midwest service center source. "The fact is
that when were talking about (a) commodity, things should
be supply-demand driven. And when its not supply-demand
thats driving up the price, theres a problem."
And while the
second-quarter looked difficult, some added that there are
potential bright spots ahead, particularly in strong
automotive, truck and energy end markets. Others are more
"I think the third
quarter will be a correction quarter. There are some signals
that things will pick up," said the first mill source.