Plates are certainly the shining star among the struggling flat rolled products in the North American market. The most recent price announcements for May shipments made by all four major North American plate producers seem to have gained acceptance in the market and have pushed domestic prices to record highs.
The rapidly increasing scrap prices are to thank for the upward move by domestic plate producers. Up until last week, scrap prices had been moving up steadily since the beginning of the year. As demand is strong enough to handle a price increase, and the warm months ahead will only lead to more consumption, all major plate producers in the US have increased their transaction prices for May shipments.
Once a product that no American steel producer wanted to make, plate has found new life in the last five years with strong consumption in the areas of energy pipe production, ship and barge building, as well as strong non-residential construction. Most plate-consuming industries are faring well in the US and keeping the demand for plates solid.
On the supply side, Canadian-US plate producer Ipsco finally announced that that they are in talks with the Russian steel giant Evraz Group that could lead to Ipsco's takeover. Evraz closed the purchase of US plate producer Oregon Steel Mills in January, and if the Ipsco acquisition is realized, this will further consolidate the plate production in the North America and bring further price discipline to the market.
Domestic plate prices for May shipments from the four major mills will be in the range of $43.00 cwt. to $44.00 cwt. ($948 /mt to $970 /mt or $860 /nt to $880 /nt) for commercial grades such as A36, and base sizes.
However, now that scrap prices are beginning to cool down, there is the question of what will happen in the other markets. For plates, demand is strong enough for producers to hold out for a few months before dropping their prices.
There is some import tonnage coming into the US. However, import prices are not too far behind the domestic prices. The small gap in price may be a very good reason why buyers are not purchasing too much offshore plate tonnage.
There are also still many antidumping restrictions on plates. In February 2007, however, the U.S. Department of Commerce had announced the revocation of the antidumping orders against cut-to-length carbon steel plate from Belgium, Brazil, Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom, and of the countervailing duty orders against cut-to-length carbon steel plate from Belgium, Brazil, Mexico, Spain, Sweden, and the United Kingdom, as a result of its sunset review. The effects of this revocation will be felt only in the third and fourth quarters of this year.
Currently, import offers are ranging from $39.00 cwt. to $40.00 cwt. ($860/mt to $882 /mt or $780 /nt to $800 /nt) FOB Gulf and West Coast for late third quarter arrivals.
License data from the United States Import Administration show that, for March 2007, worldwide exports to the US for plates in coils totaled 79,206 mt with the two major exporters being Canada at 59,049 mt followed by Russia at 10,207 mt, with Mexico at 3,642 mt. Total plates in coils imports were approximately 1.5 million metric tons in 2006.
For plates cut to length, worldwide exports to the US totaled 130,174 mt in March. The top five exporters were as follows: Thailand at 31,735 mt, Canada at 29,013 mt, Russia at 14,937 mt, Malaysia at 13,042, and Korea at 8,351 mt. Total cut to length plates imports were also approximately 1.5 million metric tons in 2006, slightly less than plates in coils. So far in 2007, cut to length plates import quantities are ahead of plates in coils.