Spot prices for US domestic cut-to-length plate have remained neutral since our last report two weeks ago, with a number of buyers and service centers anticipating that this sideways pricing trend could very well continue through the upcoming month due to status-quo order activity and the ever-creeping and historically sluggish fourth quarter.
The most commonly seen transaction ranges are being reported at about $40.00-$41.00 cwt. ($882-$904/mt or $800-$820/nt), and it continues to be reported that some of the larger service centers are still able to sell below current mill asking prices. Having said that, it's not surprising that buyers are turning to these larger service centers to help fill holes in their inventories- especially because they can generally turn around orders in just a few days.
"Why would I want to place an order directly with a mill when I can get a better price from a larger service center and have the product delivered in two or three days?" said one Midwest buyer.
The big challenge, however, is that while order activity is steady, it's still not great. Added to concern of a potential double-dip recession, end users are being extra cautious when it comes to moving forward with projects. However, considering the latest wild card (aka, President Obama's Labor Day Weekend announcement to spend US$50 billion in the next year to improve the nation's infrastructure), many are hoping that these proposed dollars will translate to tons and truckloads for the US domestic steel industry, which is still struggling to recover from the global economic downturn. While stipulations as to whether these projects will need to utilize American-made steel have yet to be made, should this be the case, imports of cut-to-length plate, which are already sluggish at best, will stand to suffer.
For now, the trend for US domestic cut-to-length plate will be neutral, with status-quo order activity and cautious buys forecasted to take place throughout the next few weeks.
