Last week, SteelOrbis reported that spot market prices in the US domestic plate market had continued to drift downward, with some sources indicating price points in the range of $32-$34 cwt. ($705-$750/mt or $640-$680/nt), ex-mill. In an apparent attempt to “stop the bleeding,” plate mills responded to the price erosion by announcing a $2.00 cwt. ($44/mt or $40/nt) price increase, effective with all new orders. By end of business yesterday, Nucor, AMUSA and Evraz North America had announced.
The challenge, one source said, is that lead times are still incredibly short, adding that some customers are still able to receive material in about two weeks. On the other hand, the increase announcements seem to have removed the “low ball” deals from the table. As of Tuesday afternoon, transactions below $34 cwt. ($750/mt or $680/nt), ex-mill, were no longer available.
Whether plate mills will try for a second increase after the US scrap buy-cycle in August is still unclear. “A lot of us think the increase doesn’t have any sticking power,” a source said. “It’s taken the bloodbath deals off the table, but I don’t know if the first increase is going to get prices higher. Mills may use the ‘announce two increases with the hopes that the first will stick’ strategy for that.”