Despite another attempted neutral trend from US domestic plate mills, spot market prices continue to ease lower.
Led by Nucor, major US plate mills kept official transaction prices unchanged for November, but regardless, US domestic plate spot prices are still on a downward trend, falling another $0.50 cwt. ($11/mt or $10/nt) in the last two weeks. Sources tell SteelOrbis that ideally, mills want to keep spot prices at approximately $50.00 cwt. ($1,102/mt or $1,000/nt) ex-mill, but actual spot market activity is occurring below that, in the current price range of $47.00-$49.00 cwt. ($1,036-$1,080/mt or $940-$980/nt) ex-Midwest mill. However, deals under the range aren't too difficult to come by for large orders, even though they continue to be rare in the domestic market at the moment, considering that buyer confidence is sorely lacking.
While there are some positives in the demand arena, the OEM and energy sectors in particular and heavy plate products according to one Midwest plate distributor, demand has shown a slowdown in the last few weeks, and most continue to anticipate that spot prices still have room to fall. In the normally tight-supplied domestic plate market, mill lead times have narrowed to about five to six weeks, but many smaller distributors are finding that the lead times are still too long when market prices are on a downtrend, opting to order from large service centers that can offer rapid deliveries instead.
But domestic lead times now largely in December, and moving into January in mid-November, may prove to be positive for the domestic plate market, as the beginning of the year is a typically stronger period of activity in the plate market and steel industry in general, when many buyers begin to replenish low inventories. Another factor that may help to end the price slide is a decline in arriving imports in October and November due to lower booking activity a few months back. Heavy low-priced import plate penetration in the US market in August/September was one of the main causes of a domestic price decline.
As for current import bookings, although Russian plate prices of $43.00-$45.00 cwt. ($948-$992/mt or $860-$900/nt) DDP loaded truck in US Gulf ports, unchanged since early October, are still well below US domestic spot prices, the range between the two is narrowing. And with serious uncertainty of how much further domestic spot prices could fall, the offers have become less attractive in recent weeks. Brazilian plate sales prices in the US have fallen $1.00 cwt. ($22/mt or $20/nt) to $45.00-$46.00 cwt. ($992-$1,014/mt or $900-$920/nt) DDP loaded truck in US Gulf ports in the last two weeks, mostly because of pressure for falling US prices and less expensive Russian offers, according to industry insiders.