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Steel plate buying steady in uncertain market

Keywords: Tags  steel plate, ArcelorMittal USA, SSAB Americas, Nucor, Metals Service Center Institute, MSCI, Catherine Ngai

NEW YORK — Buying activity in the steel plate sector has remained steady in recent weeks, sources said, although distributors and service centers said continued squeezed margins, low inventory levels and lackluster demand has continued to plague the market.

"The mills are trying to position and get an increase in the market, but most people in the market don’t think it’s justified because demand isn’t there," one Midwest service center source said. "There’s still a lot of (downstream) competition and that is the biggest problem out there."

Earlier this month, SSAB Americas hiked plate by $25 per ton (, Aug. 9), just four weeks after a $30-per-ton increase in July. The move was quickly followed by Nucor Corp. (, Aug. 13), which sources said had happened to solidify the earlier round.

However, without ArcelorMittal USA LLC—the other major player in the market—getting on board, some sources said it may be more difficult to gain traction on the recent upward move.

"(ArcelorMittal) kind of throws the whole thing in a dizzy," one mill source said.

A spokesman for ArcelorMittal USA could not be reached for comment.

While mills reported stable bookings recently, distributors have kept inventory levels thin in an uncertain market.

U.S. service centers held 993,000 tons of inventory at the end of July, the equivalent of three months’ supply, down 12.1 percent from 1.1 million tons (3.3 months’ supply) a year earlier, according to the latest data from the Metals Service Center Institute.

However, some service centers said business has been better than last year, particularly on the fabrication end.

"We’re doing good and getting more hours in the steel shop, so we’re happy," a second Midwest service center source said. "Last year in July, things died. But this is much better than it was last year. Price levels, though, are too low and margins are too low."

Other service centers said the mining sector has been particularly hard hit, which has affected the heat-treated and alloy plate markets.

Sources also speculated that another round of price hikes may come in the near term to solidify the second increase and get prices up to a more comfortable level for the mills, although service centers warned that it’s uncertain whether the current round has enough legs.

"Plate prices have been pretty steady, but it’s too early to tell if the recent hikes are going to stick," a Northeast service center source said.

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