With a number of outages at US domestic plate mills planned for late March/early April, plate spot prices are rising and lead times are moving into mid-to-late Q2.
So far, the recently announced $2.00 cwt. ($44/mt or $40/nt) price increase for May delivery is slowly being absorbed by the marketplace. The increase, announced by SSAB Americas on March 10 and quickly followed by other plate producers, has pushed US domestic plate spot prices up $1.00 cwt. ($22/mt or $20/nt) on the high end from previously reported ranges two weeks ago to $52.00-$55.00 cwt. ($1,146-$1,213/mt or $1,040-$1,100/nt) ex-Midwest mill. However, the lower end of the range may only be available through March as spot prices are predicted to move into the $54.00-$56.00 cwt. ($1,191-$1,235/mt or $1,080-$1,120/nt) ex-Midwest mill range by early April.
Demand continues to be steady, and so the planned outages will make April an extremely tight month in the plate market. And while yet another price increase for at least $40/nt is predicted around mid-April for June delivery, there may be a price correction looming toward the end of Q2 and into early Q3. Even though order activity has been steady for much of 2011, there is concern that because plate supply from domestic mills has increasingly tightened over the past few weeks, the apparent strength in the market is being driven more by supply than real demand.
Looking offshore, the most competitive offers continue to be generated from Russia, where current prices still range from $46.00-$48.00 cwt. ($1,014-$1,058/mt or $920-$960/nt) duty-paid FOB loaded truck in US Gulf ports. The offer is for late April/May production (July/August arrival) and although interest is strong, sources indicate that the offer has now been unchanged since mid-February, and tonnage available for orders placed today is limited.
As for inventory from arriving imports, 61,126 mt of cut-to-length plate arrived into the US in February-seven percent higher than the 56,821 mt of plate imported in January. While Canada continues to account for the largest share of imported plate into the US (22,826 mt), the most significant month-over-month increase came from Russia. Russian mills exported 8,840 mt of cut-to-length plate into the US in February, which represents an increase of 8.7 times over the 1,016 mt Russia exported in January. On the other hand, the biggest monthly decline came from Australia. After exporting 10,410 mt of cut-to-length plate to the US in January, Australian mills only exported 27.3 mt in February.
