Plate prices in the US eased Friday as buyers said mills were more willing to negotiate after their latest $40/st price hikes (for July production) encountered headwinds. However, buy-side sources were not eager to push for lower numbers because their buying needs are limited.
A service center source said he had been seeing plate prices slip recently as mills were showing more willingness to negotiate, with a price of $660/st delivered for A36 commodity plate "very achievable." He added that pricing could probably be lower "but who wants to push it."
A seasonal downturn has exacerbated already weak demand and lower mill prices could translate into lower distributor prices as well. A second service center source said lower prices are available for solid volume orders, "although I am very reluctant to ask the mills to come down because this will cause confusion in the market and let's face it, we do not want another slid backwards."
Despite discussions of softening plate prices, the focus of sellers is on maintaining price levels through the summer. Most believed producing mills still had the upper-hand on pricing as import options remain limited. However, with scrap prices falling and typical seasonality there is more nervousness in the market.
A mill source said everyone should be reasonably firm on pricing. "As we know, lower prices will not create any demand," he said, adding that larger buyers paying $640-$660/st delivered seemed "appropriate," with $700/st expected from small volume buyers. "The key to maintaining this is service centers getting their prices up, so they are actually selling above replacement costs."
A second mill source said it was "going to be tough for the market to hold," allowing that lower numbers heard in the market were accurate. However, he was hoping prices were closer to $660/st delivered, rather than $640/st. "The mills aren't full by any means and with pressure on scrap there is certainly downward pressure," he said.
Regional differences were playing a part in some of the pricing differentials, a third service center source said. While the southern US had a softer price structure, he said Midwest mills are not that flexible and their numbers were above the $640-$660/st delivered levels. "I always believe there is a number out there if you want to pony up the tons, but I don't see a bunch of 20,000 st buyers out there right now," he said, noting that inventory turnover remains slow.
The third service center source didn't see the mills easing up on pricing just yet and added "in the short-term, the mills should realize they have most of the cards. Lead times are a better indicator of potential downward price moves in the short term -- if you have July booking decently, why drop prices the first week of June."
Platts widened its US plate price assessment range Friday as the floor for plate prices fell but small transactions were still heard at higher prices. It assessed commodity grade A36 plate at $630-$670/st, down from $650-$670/st on an ex-works southeastern US mill basis. The move lowers the daily assessment's midpoint $10/st day on day to $650/st.
