US domestic plate spot prices had been on an upward trend since late 2010, but after hitting a wall in early May, they are beginning to retreat for the first time this year. Spot prices have fallen about $1.00 cwt. ($22/mt or $20/nt) on the high end since our last report two weeks ago to $54.00-$55.00 cwt. ($1,190-$1,213/mt or $1,080-$1,100/nt) ex-Midwest mill. For larger orders however, a growing number of spot deals as low as $53.00 cwt. ($1,168/mt or $1,060/nt) ex-Midwest mill have been heard, and spot prices are likely to drop to $53.00-$54.00 cwt. ($1,168-$1,190/mt or $1,060-$1,080/nt) ex-Midwest mill by late May.
Furthermore, continued softening throughout June is expected as decreasing US domestic flat-rolled prices have resulted in a sharp decrease in international slab prices. With slab availability plentiful, industry insiders are speculating that slab prices will either stay neutral or decline further in Q3. The resulting downtrend in domestic plate prices isn't expected to be as significant however, as manufacturing demand remains stable in addition to strong demand from many other end-use sectors such as wind tower construction and energy.
What is primarily driving the current decline in spot prices is some leveling off in service center activity and higher inventories due to arriving imports. According to the US Steel Import Monitoring and Analysis System (SIMA), 76,332 metric tons (license data) of cut-to-length plate arrived into the US in April, compared to 63,761 metric tons imported in March. The monthly average-over the last 12 months-of arriving imported plate tonnage into the US was 57,000 metric tons.
As for current import activity, interest is still strong, especially for Russian offers. With August delivery dates, buyers in the US have informed SteelOrbis that Russian plate offers are well worth the wait at $45.50-$46.50 cwt. ($1,003-$1,025/mt or $910-$930/nt) duty-paid FOB loaded truck in US Gulf ports. In addition to a current approximate $9.00 cwt. ($198/mt or $180/nt) difference between Russian offers and US domestic plate spot prices, Russian offers are attractive for another reason as well. One major US plate mill has a planned shutdown in place for September- which will curb supply-preventing US plate spot prices from falling too far from current levels and making August arrival valuable to many.