Soaring scrap prices and strong demand, both globally and domestically, have pushed US domestic plate producers to raise their prices yet again.
Unlike other flat product markets, in which raw material costs are the driving force behind the wave of price increases, standard plate is not only experiencing the same bump in raw material costs, it is also seeing solid demand. Over the past year, while demand for other steel products lost its luster, plate demand continually grew stronger. End-use markets such as shipbuilding and railcar building have remained strong, while energy-related markets have continually grown even stronger. Robust demand coupled with tight supply (and rising raw material costs) has given mills a valid reason to up their plate prices.
August spot prices for standard A36 grade plate are up significantly from July numbers. ArcelorMittal made the first move, raising its prices by $50 /nt ($2.50 cwt. or $55 /mt) effective with August shipments. Two other major plate mills, Nucor and Claymont, doubled ArcelorMittal's August price increase, each boosting its prices by $100 /nt ($5.00 cwt. or $110 /mt) for August shipments.
US domestic plate prices are now in the range of $71.50 cwt. to $72.50 cwt. ($1,576 /mt to $1,598 /mt or $1,430 /nt to $1,450 /nt) FOB mill for commercial grades A36 base sizes coiled and mill plate in the Gulf region.
Since the beginning of this year, domestic mills have upped plate prices every month, in response to strong domestic and global demand. Not only are domestic plate mills working to supply the US market, but due to such a strong demand globally, the mills have been exporting to other countries in need of the material as well. As domestic mills continue to export, and demand in the US remains strong, supply will remain tight, making it difficult for end-users to find the steel they need. Many buyers have commented that plate supply is extremely tight and the material is tough to get.
When comparing US export figures for the months of March, April, and May of 2007 and the same months of this year, records show a significant increase in US export activity for cut-to-length plates. For the three-month span in 2007, 272,605 mt of cut-to-length plates were exported from US ports, while 368,373 mt were exported in the same three-month span this year. A similar pattern was found for plates in coils with March, April, and May of 2008 showing 44,462 metric tons more exported than the same three-month span in 2007. Data provided from the United States Import Administration (US Exports of steel mill products).
Another factor adding to the tight US supply is the lack of imports coming to the US. Not only are US mills exporting a portion of what they produce, but imported material is scarce. Though there are some spotty offers for plate from countries such as Malaysia and Thailand, they are only in limited quantities, and the offers aren't very attractive.