Last week, SteelOrbis reported that many within the US were baffled at the fact that some domestic plate quotations were within inches of domestic HRC prices. Not only were the price points too low, sources noted, they were “not even close to being in place that would allow mills to be profitable.”
This week, as domestic flats producers have started to roll out their second round of price increases within a month, plate mills have decided to join them.
The plate increase kicked off with announcements by ArcelorMittal USA (AMUSA) and SSAB, who announced $2.00 cwt. ($44/mt or $40/nt) increase announcements. Yesterday, Nucor announced they would be raising prices by a minimum of $2.50 cwt. ($55/mt or $50/nt), effective with all new orders. Sources within the market say they’re not surprised that Nucor has announced the largest increase, as some market players indicated that as recent as late last week, they’d heard the mill was quoting tons at $28 cwt., delivered into Houston, which, after accounting for an approximate $3.00 cwt. ($66/mt or $60/nt) freight cost, “meant their pricing wasn’t even close to being sustainable. Nucor was undercutting everyone else just to get some orders on their books.”
As far as current pricing, this week’s average spot market price range remains at approximately $28 cwt. ($617/mt or $560/nt), ex-mill, unchanged in the past seven days, although deals slightly below that range have been available based on tonnages. It’s further speculated that this week’s increase announcements will “take the lowball deals off of the table,” which is similar to what happened when domestic HRC producers announced their first price increase earlier this month.
“We think the mills probably took some cheap orders as a means of helping to pad their books and extend lead times out,” another source added. “If nothing else, this should help get prices up in the short term.”