NEW YORK Lead times at
some domestic plate mills could start to come in now that
planned spring outages at a number of facilities have
concluded, sources said, noting that any significant lead time
reduction could begin to put downward pressure on the recently
stable steel plate market.
Planned maintenance outages at
several plate mills, including SSAB Americas outage in
Montpelier, Iowa, were one major factor lending strength to
first-quarter plate price hikes, sources said. Since March,
Lisle, Ill.-based SSAB, Charlotte, N.C.-based Nucor Corp. and
Chicago-based ArcelorMittal USA LLC have all pushed up
published plate prices by $60 per ton (
amm.com, March 8).
As a result, AMMs
published spot price rose to $37 per hundredweight ($740 per
ton) f.o.b. Midwest mill in early April and have held steady in
the weeks since.
But since most major mills have
now concluded their recent outages, some market sources said
continued pricing strength in the plate sector will largely
depend on whether producers can keep the four- to six-week lead
times reported during the outages.
"To figure out whats going
to happen with plate, all you have to do is look at the
flat-rolled guys trying to jack prices up since last year with
no success. While the plate market isnt as saturated and
doesnt have as much overcapacity as coil, if lead times
fall to two to three weeks theres no way in hell
theyll hold the increase," a Midwest service center
source told AMM.
A few service center sources
have reported that lead times at at least one plate mill have
already started to soften, with some product being shipped as
much as two to three weeks ahead of schedule.
"When lead times are short,
thats an indicator that mills arent full and that
gives customers more leave not to book immediately," a mill
source said. "For us, pricing is under pressure and so is
demand. Im now hearing that certain mills are shipping
ahead of promised weeks."
Another factor that could
contribute to softer mill pricing is the difficulty that
service centers have had pushing higher prices through to end
"Plate is pretty stagnant right
now. The prices came up a little bit, but theres still a
lot of cheap resellers out there," a southern service center
source said. "My business isnt good, but Id call it
tentative. People are still scrambling to sell what they
The Midwest service center
source agreed, noting that while there are only a number of
domestic plate mills, service center customers are plentiful.
"We try to get what we can, but competition sets the limit for
how high you can go," he said.
With minimal imports, a brighter
outlook for the spring construction season and continued
strength in the heavy transportation sector, some say the plate
market is actually looking fairly strong even with the outages
coming to an end. "Things have pretty much stabilized. I
dont see any tremendous growth or tremendous erosion in
the marketplace in the near term," a second Midwest service
center source said.