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Steel plate market malaise seen lingering

Keywords: Tags  steel, Nucor, Evraz, SSAB, steel plate, plate prices, Catherine Ngai


NEW YORK — The steel plate market remained in a malaise this past week as buyers questioned whether recent domestic price increases would have any success in the downstream market.

"We’ve seen business slow down," one Midwest service center source said. "It’s getting more competitive out there and people are just dropping margins."

The plate market, which has seen little pricing movement for most of the year, saw a number of material changes in the past week, including Evraz Inc. North America announcing its plan to suspend operations at its Claymont, Del., facility (amm.com, Oct. 14).

The announcement came on the heels of ArcelorMittal USA LLC’s $50-per-ton price increase (amm.com, Oct. 9), followed by a $40-per-ton hike by Evraz (amm.com, Oct. 18) and $30-per-ton increases by SSAB Americas (amm.com, Oct. 16) and Nucor Corp. (amm.com, Oct. 17).

Buyers were quick to respond to the increase, doubting that it had any strength because demand, while stable, was lackluster and didn’t warrant a hike.

However, others questioned whether the Evraz announcement meant that domestic steelmakers had a leg up because of the imminent reduction in supply.

Nucor president and chief executive officer John Ferriola said during a third-quarter earnings conference call Oct. 17 that since the Evraz announcement his company had seen an "incremental pickup in inquires" for plate in thicknesses of less than 3 inches (amm.com, Oct. 17).

While most of the steelmakers didn’t give a reason for the increase, ArcelorMittal said in a letter to customers that the move was "necessary in order to restore value to the full range of plate products" it produces.

A second Midwest service center source said that he would have difficulty selling higher-priced steel to his customers, adding that there has been a "panic" among some of the larger distributors to get rid of inventory before year-end.

Discrete plate deals were unchanged this past week at $35 per hundredweight ($700 per ton), with certain competitive regions closer to the $34- to $34.50-per-cwt ($680- to $690-per-ton) range.

While the verdict is still out on how successful mills will be in holding the line on newer pricing, traders indicate that foreign material hasn’t been very competitive, with import figures for cut-to-length plate in August coming in at less than half the total for the same month last year.

Others underscored that without a fundamental pickup in demand, neither the market nor prices would see a meaningful change.

"We’re moving into the fourth quarter, and because of the holiday season I don’t see any spikes in pricing or mill lead times," a third Midwest service center source said. "I’m confused about the price increases ... but I do hope things get stronger."om


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