Spot prices for US domestic cut-to-length plate have remained steady since our last report two weeks ago, although concerns about downticks in hot rolled coil (HRC) pricing are beginning to emerge.
“If HRC ticks down in the $25.00 cwt. ($550/mt or $500/nt) I’ll expect to see things change,” said one Midwest buyer. “If hot rolled winds up that low I don’t see that plate won’t start to head in that direction.”
For now, however, spot offers for US domestic plate remain consistent with the range previously reported, at about $39.50-$40.50 cwt. ($871-$893/mt or $790-$810/nt).
Despite the recently seen stability in transaction pricing, this is not necessarily an indicator of bountiful activity within the market. And while the latest MSCI data reflects that monthly shipments of carbon rolled cut-to-length plate have in fact experienced month-on-month increases for the past three months (291,500 nt in July, 322,200 nt in August, and 326,000 nt in September), most buyers are reporting that activity, as they see it, has remained steady at best.
Add that to the ever-growing uncertainty that if HRC pricing continues to fall, plate is sure to follow, it’s not surprising that increased caution when it comes to making buys has reemerged.
Buyers are plugging holes within their inventories, if that, and many are holding off as long as possible for concern of buying at one price one week only to see it lower the next. Buyers in Harris County Texas are among those keeping the tightest watch on stockpiles, so as to not get slapped with a high end-of-the-year inventory tax, which is assessed by the county at the end of every calendar year.
“We’re going to take things as tight as we can take them,” commented a Texas-based service center, indicating that without end-use activity to support making larger buys, they're only going to purchase only as they have to.
That having been said, the forecast for US domestic plate will once again remain similar to our previous report, at neutral-to-slightly-downward through mid-to-late November, at which point HRC is expected to once again stabilize.
Looking forward, demand is expected to get a little worse before it gets better.
As far as imports go, they too seem to be winding down. According to the most recent data put out by the US Department of Commerce Import Administration, import tonnages for cut-to-length plate are currently at 20,418 mt, (license data), with the most significant offshore importer being Sweden, at 5,178 mt. Although October may very well see a month-on-month decline from the 57,250 mt import tonnages of cut-to-length seen last month, Sweden has already more than doubled its imports, which topped out at 1,929 mt in September.