The price for steel plate in the United States has slipped to the lowest point in eight months due to weak service center demand and fears that Section 232 tariffs could be removed against Canada and Mexico, market participants said.
Fastmarkets AMM assessed cut-to-length plate at $47 per hundredweight ($940 per ton) on Friday March 1, down by 1.1% from $47.50 per cwt previously and off 5.1% from $49.50 per cwt late last year.
The plate price was last at $47 per cwt in June 2018, Fastmarkets AMM pricing archives show.
Lead times are in a wide range of four to eight weeks, sources said.
Higher prices take a hike
While some mills remain busy with project work in the line pipe sector in particular, others have more open order books and are willing to offer discounts if necessary, sources said.
"Service centers are probably the weakest link" among mill customers, one Great Lakes service center source said. Service centers are not only scaling back buys from mills but also continuing to lower resale prices, he said.
It's no accident that service centers have been cautious about buying given an unusually wide spread between plate and hot-rolled coil prices as well as lackluster demand, a Midwest service center source said. "We have been a little disappointed in plate demand so far this year. It's been a lot less than our expectation."
Thus source dismissed rumors of a plate price increase. "I cannot see the logic of it from this desk."
A West Coast end user echoed those concerns, adding that another looming threat is the potential easing of Section 232 tariffs versus Canada and Mexico.
What happens in a post-Section 232 world?
"Demand has really not been that strong. It's good but it's not robust or growing. And then if Section 232 goes away, you have Algoma and Ahmsa that can ship plate again," he said.
Algoma is a Canadian flat-rolled steelmaker and plate producer. Ahmsa makes flat-rolled products, including plate, in Mexico.
Plate mills in both Canada and Mexico had been big suppliers to the US until President Donald Trump's administration hit the trading partners with Section 232 tariffs, 25% in the case of steel, on June 1 of last year.
Canada exported an average of 16,125 tonnes per month of cut-to-length plate to the US in the six months before it was hit with Section 232 tariffs. The US' northern neighbor exported a little more than half that amount, only 9,374 tpm on average, in the six months following the imposition of the tariffs, Commerce Department figures show.
The trend was even more pronounced in Mexico, where plate exports to the US plummeted by 77.6% to 1,885 tpm on average in the six months following June 1 from an average of 8,432 tpm in the prior six months.
Consolidation, scrap to the rescue
Still, plate prices are unlikely to fall as hard as hot-rolled coil prices given that import options have been limited since a 2016 plate trade case, that end-user demand - particularly from the energy sector - is still healthy and that the US market is largely consolidated among three mills: Nucor, SSAB and ArcelorMittal, sources said.
"Plate's strong, plate's firm - there's not a lot of supply in the marketplace," one Midwest end-user source said, noting that his company has found certain sizes and grades hard to come by.
A West Coast distributor source agreed. "I'm absolutely shocked that the plate guys haven't done anything [to raise prices]. Maybe they're waiting for the scrap" prices to go up, he said.
US ferrous scrap market participants expect all scrap grades to log at least a $20-per-gross-ton price increase in the March domestic trade.
source: fastmarkets MB |
