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US steel plate prices jump again despite weak demand

Wednesday, 21 October 2020

US steel plate prices saw a significant increase on Oct. 21, following a fourth round of plate price increases.

The daily Platts TSI US plate index was $29.50 higher week on week at $666.75/st on a delivered Midwest basis, and was $28.75 higher from Oct. 20.

While plate prices have been steadily rising since late August, the upward momentum has continued to be driven by rising hot-rolled coil prices rather than improving demand for plate. Mills were attempting to keep pace with HRC prices, according to market sources, as HRC prices have risen over $220/st since early August.

After SSAB Americas announced a $50/st price hike on Oct. 16, ArcelorMittal followed with an identical increase on Oct. 19. Nucor supported the move with the announcement of a new minimum base price at $670/st on a delivered basis, effective with all new orders for December production.

While the hikes were still fresh in the market, buy-side sources said sub-$670/st offers were no longer available and mills had started quoting new inquiries at the higher levels.

A Midwest service center source was quoted at $670/st on a delivered basis for several inquiries, noting that another mill was offering spot tons at $690-$700/st on a delivered basis following the price increases.

“What’s driving the plate market is the HRC market,” said the source, who noted an uptick in buying activity but attributed it to panic buying as many service centers carried low inventories, rather than improved demand in end-user markets. “There’s a lot of panic in the plate industry now,” the source added.

A second service center source said plate mills would “try to dig in at $670/st,” citing the momentum from HRC prices and lack of competition from imports as supporting factors.

Plate demand remained “subpar,” according to a third service center source. The source had received an offer at $690/st on a delivered basis, but believed $670/st to be attainable from the same mill.

The source indicated plate mills needed longer lead times in order to remain firm on the latest round of price increases.

The average lead time of domestic plate mills lengthened by 0.3 week to 5.7 weeks, according to Platts data, as at least one mill extended its lead times into early December and November availability was limited.

The combined Platts TSI price index uses a volume-weighted average calculation – according to TSI's standard – to determine value on a delivered Midwest basis.

-- Ingrid Lexova

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