With the recently announced $5/lt to $10/lt decline in busheling scrap pricing and status-quo demand at the service center level, the upward trend in spot pricing for plate has finally begun to cool off.
Although there has been some softening in spot pricing for other products within the flats sector, plate, it seems, has leveled off. Spot pricing has trended sideways since our last report, with offers still being seen at approximately $42.00 cwt. to $44.00 cwt. ($926/mt to $970/mt or $840/nt to $880) FOB mill. This is, however, still roughly $3.00 cwt. ($66/mt or $60/nt) below mills' asking price.
Demand has remained neutral in recent weeks and a number of service centers are reporting orders as being consistent, but not great. "The market is more demanding, because there isn't a lot of demand. But we are moving sideways" commented one service center. "We just have to make more calls and be more creative in order to make money." That's not to say, though, that plate isn't moving, as lead times continue to remain at approximately 12 weeks. Service centers are also reporting increased levels of inquires, although not many are turning into solid orders.
This trend may relate largely to pending bridge projects- because according to a 2009 report by the American Society of Civil Engineers, nationally, one in four are either deficient or obsolete. So in theory, some of the stimulus money allocated to infrastructure improvements should have been funneled to have them repaired.
The challenge with bridge projects, though, is that these types of infrastructure improvements are not "shovel-ready" (some can take years to get off the ground due to design and planning) leaving most of these repairs relatively untouched by funds allocated through the American Recovery and Reinvestment Act. Instead, most of the stimulus money already spent has been directed to infrastructure improvements that are able to begin immediately, such as road repair, with the idea that job creation would help bolster the economy. The good news, though, is that only a third of the money designated to the Department of Transportation has been paid out, with approximately $26.05 billion remaining. And even though bridge projects do take longer to get off the ground, they eventually will start to materialize.
For now, though, things within the domestic plate market will continue to move sideways, with pricing forecasted to remain neutral for the next few weeks.
Shifting focus offshore, import offers remain eerily quiet- with traders reporting having not seen any offers to speak of. As reported two weeks ago, China, while once a potential player in the market, is facing another duty circumvention case with regards to plate exporting practices to the US.