Despite dips and lulls being seen for pricing of most US domestic flats products, domestic plate transaction pricing has in fact remained stronger than its other flats counterparts, with only a slight $0.50 cwt. ($11/mt or $10/nt) dip being reported for average transaction pricing having taken place since our last report two weeks ago.
The average transaction pricing for plate is currently being reported in the approximate range of $38.00 cwt. to $40.00 cwt. ($838/mt to $882/mt or $760/nt to $800/nt), ex-Midwest mills.
A major concern for those buying and selling in the plate market revolves around the overproduction of hot rolled coil (HRC). "It's insane," commented one trader. "And when we look and see how weak that product is, no matter what, plate will be pulled down some alongside it." The bright-side, indicated another, is that once activity begins picking up and stimulus funds continue to make themselves increasingly apparent, that "this product will be the best [flat] and begin to tighten the quickest."
However, tepid end-user activity combined with a recent report by the US Federal Reserve that manufacturing output in June experienced a 0.4 percent month-on-month decline from levels reported in May, continues to indicate that economic recovery remains relatively unstable. And as stated in our last report two weeks ago, buyers are continuing to buy, even just a little bit less than they need, due to concerns that prices will dip once again within a day or two after orders being placed.
"When my inventory levels hit a month, I no longer go out and buy another month's worth of supply", relayed another buyer. "I go out and buy an additional two weeks of material." There are some service centers who can deliver within just a couple days, and because I can get what I need quickly I'm managing my inventories a lot tighter."
For now, though, the forecast for plate is stable to slightly down, until the point where spot-pricing for HRC becomes more stable.
In terms of current reported imports, activity is oddly quiet. However, according to the July 20 report by the US Department of Commerce Import Administration, for the month of July, imports of cut-to-length plate thus far are reported at 49,202 mt (license data), which will have the month on par to reflect relatively sideways (if not increased) import tonnages from those seen during the month of June (50,858 mt). At current, the most significant offshore importer of this product is Germany, at 6,573 mt.