Despite strong end-use demand, US plate producers could not escape the oppressive downward pricing pressure affecting the entire steel industry, and officially lowered their prices as of November.
Unlike the faltering demand for other steel product lines in the US and around the world, demand for steel plate, though off slightly from its peak, has remained relatively solid. The strong demand is mainly attributed to the energy market and infrastructure development, which are both expected to remain robust through the remainder of this year and throughout 2009. In addition, despite the economic downturn all over the globe, plate used in ship building, another market contributing to the overall sturdy demand for plate, is still being consumed heavily.
However, after a long stretch of price increases followed by price stability, US domestic plate producers officially lowered their numbers for the first time this year, and according to buyers, more decreases are expected.
Domestic standard plate prices are now in the range of $64.00 cwt. to $66.00 cwt. ($1,411 /mt to $1,455 /mt or $1,280 /nt to $1,320 /nt) FOB mill for commercial grades (A36, base sizes, coiled and mill plate).
Although end-use demand is strong and domestic plate mills have no problem selling at their quoted price, they have room to move prices down further and some suspect that they may have to. Months of depreciating scrap numbers have significantly lowered mills' production costs, but mills have barely lowered their plate prices in comparison. Also, import offers, while scarce, are appearing at much lower pricing levels than in previous months, which could potentially threaten domestic business.
Currently, most countries that are offering plate imports to the US are all falling within the same pricing range. Most offshore plate offers can be found in the range of $52.00 cwt. to $54.00 cwt. ($1,146 /mt to $1,191 /mt or $1,040 /nt to $1,080 /nt) FOB Gulf Coast, though offers are few and there is not much buying activity due to the long lead times, uncertainty of the domestic market direction, and the inventory reduction that is taking place at most service centers. Also, some traders that had made large offshore purchases a few months back are now said to be caught with inventories that have been devalued.
Data from the US Import Administration show that during the month of October 2008, for plates in coils, worldwide export tonnage to the US totaled 113,447 mt with the top three exporters being: Turkey, at 43,589 mt; Canada, at 38,054 mt; and Netherlands, at 15,714 mt. For cut-to-length plates, the data show worldwide export tonnage to the US totaling 87,296 mt with the top three exporters being: Ukraine, at 32,366 mt; Canada, at 23,725 mt; and Russia, at 7,286 mt.
On the legislative front, the International Trade Commission (ITC) is now conducting a second full sunset review of the antidumping (AD) orders against cut-to-length carbon steel plate from China, Russia, and Ukraine. Two Russian and two Ukrainian producers are actively participating in this review.