NEW YORK Steel plate prices saw a slight uptick this past week as market sources reported that mills were more determined to push for higher numbers.
But while higher prices may be achieved in the short term, some market participants wondered why SSAB Americas announced a $20-per-ton-hike Oct. 24, given flat market conditions (amm.com, Oct. 24 ), amid skepticism that another increase can be passed on to customers.
"Most, if not all, service centers have kept their inventories lean," a Midwest distributor source said. "Mill lead times are still stinkin short and I dont really believe anything has changed. My gut tells me the rest of the fourth quarter is what youll see today and maybe well see a slight uptick in the first quarter of next yearbut I definitely wouldnt look for anything monumental."
Discrete plate transactions were reported at $36 per hundredweight ($720 per ton), up from $35 per cwt ($700 per ton) a week earlier, with some buyers saying they had a few extra days to purchase at the old prices.
The increase by Lisle, Ill.-based SSAB Americaswhich competitors have yet to followappears to have been prompted by a need to get better value for its products, a point underscored during Swedish parent company SSAB ABs third-quarter earnings conference call Oct. 25.
"There is currently a positive momentum in the market," SSAB president and chief executive officer Martin Lindqvist said, adding that the company needed to increase its plate margins after an uptick in scrap costs (amm.com, Oct. 25), he said.
However, service centers continue to cite Evraz Inc. North Americas decision to idle its Claymont, Del., facility (amm.com, Oct. 14) as evidence that demand remains lackluster.
"If demand doesnt increase, well see more things like Evraz happen to some of the other smaller guys," a Midwest service center source said.
"Weve seen some nice activity the last two weeks, but the fourth quarter is going to get slower and the first (quarter) wont be anything to write home about either," a second Midwest service center source said.
Mills sources, however, cite a number of bright spots in certain end markets. Order intake rates also are said to have held steady even after recent price hikes, which could be an indication of acceptance in the market.
"Outside of mining, there have been some good end markets out there, like transmission towers, heavy industrial markets, electrical transformer markets and wind towers," said one mill source, who added that his mill has held the line on higher pricing.
But a second mill source said there has been some erosion of increases in certain parts of the country, including the South. "Weve seen (competitors) not really quoting all of the higher number," he said. "Demand on the whole has been growing. Its been better than where it was in the previous three years, but its not magical demand and theres still a lot of availability."