NEW YORK Spot transactions for steel plate products have been limited this week, according to market sources, who see further signs of declining demand in key markets.
Prices for carbon plate have stagnated at $38 per hundredweight ($760 per ton) f.o.b. Midwest mill thanks to minimal spot buying, mill and service center sources said. Many said that underlying demand for plate products from certain key sectors looks to be tailing off, at least through the end of 2012.
"Weve continued to see a really conservative approach to buying from distribution," one mill source said. "Just recently, we have seen some announcements from major manufacturers that are evidence that the market is slower."
For example, Caterpillar Inc. said earlier this week it would be taking some capacity offline in November and December at its Decatur, Ill., facility. The wind tower market also is at a standstill amid uncertainty over the future of tax breaks for renewable energy production, sources noted (amm.com, Sept. 21).
While some end-use sectors, such as energy and certain areas of the mining industry, remain strong, the potential decline from major plate-consuming industries is being felt throughout the market.
"Its like the analogy of (having) one foot in a bucket of boiling water, one foot in a bucket of ice water," one Midwest service center source said. "The average is good, but youre miserable."
He noted that lead times from domestic producers remain short. "If I can replace an item in three weeks, why would I buy very much of it now?" he said.
Sources said that domestic material looks attractive even to buyers in port cities as the spread between imports and domestic material has narrowed. While the price of cut-to-length plate is $38 per cwt, the price of imported medium plate is in a range of $730 to $760 per ton ($36.50 to $38 per cwt).
Citing production costs, some sources said they hope prices do not have much more room to fall.
One southern service center source doesnt see plate "coming down much more unless the lack of demand forces it."