US plate prices continue to soften despite sparks of interest

Tuesday, 28 April 2009 02:51:58 (GMT+3)   |  
       

Domestic US plate prices continue to slide despite slightly improved inventory levels, increasing scrap prices, and a modest up-tick in commercial activity.

Most US domestic transaction prices have continued to decline throughout April and now range from approximately $27.00 cwt. to $28.00 cwt. ($595 /mt to $617 /mt or $540 /nt to $560 /nt) FOB mill in the Midwest and Gulf for commercial grades (A36, base sizes, mill plate). Larger customers requesting significant tonnage will be the most likely to see offers at $27.00 cwt. ($595 /mt or $540 /nt) and perhaps even lower. Meanwhile, transaction prices on the West Coast currently range from about $31.00 cwt, to $32.00 cwt. ($683 /mt or $620 /nt) FOB mill.

Nonetheless, SteelOrbis has learned that US interest for plate has been increasing, as more offers are being quoted, although they not yet leading to too many bookings. Furthermore, according to the most recent Metal Service Center Institute (MSCI) monthly shipment and inventory report, total US service center plate inventory declined from 1.15 million nt in February to 1.08 million nt in March, and inventory overhang decreased from an estimated 4.1 months in February to 3.7 months in March, according to current shipping rates.

Moreover, moving forward, US domestic scrap prices are currently expected to increase by about $15/long ton in May, which may lead domestic mills to increase or at least leave plate prices unchanged in May. Overall demand remains too depressed to suggest any near-term stability, although significant monthly price declines may be a thing of the past.

On the import side, most traders have given up on pursuing import plate offers for the time being due to the long foreign mill lead times and lack of import price competitiveness. In order for any deal to even make sense right now, import offers would have to be below $24.00 cwt. ($529 /mt or $480 /nt), but most import offers can currently be found in the mid-to-high$20s cwt. Furthermore, if serious buyers are interested in imported plate, there is still an abundant excess of a variety of sizes of plate tonnage on the ground at multiple US ports that buyers could pick up quickly at a discounted rate.

License data from the US Import Administration demonstrates that import tonnage of cut-to-length plates has decreased drastically in the first three months of the year, with plate imports totaling 102,194 mt in January, 65,313 mt in February and 35,255 mt in March. Canada, Sweden and Japan were the top three plate tonnage importers to the US in March, accounting for 11,067 mt, 3,700 mt and 3,536 mt respectively. 

 
 


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