US plate prices continue to slip on import pressure
After stabilizing briefly in early September, US domestic plate spot prices are once again falling under tremendous pressure from the import market.
Even with relatively strong US domestic plate mill order books, steady end-use demand levels from some major plate-consuming sectors such as energy and extended lead times that are anywhere from mid-October to mid-November (depending on the mill), mills are still having a hard time keeping domestic plate spot prices firm. While the US domestic spot price range of $48.00-$50.00 cwt. ($1,058-$1,102/mt or $960-$1,000/nt) ex-Midwest mill hasn’t moved in the last two weeks, orders being placed on the lower end of the range (and a few exceptionally large tonnage orders taking place just under) have become more prominent.
The main culprit of the softening US domestic plate market is import competition–both from futures bookings and a glut of arriving imports, some of which are being sold off at about $2.00-$3.00 cwt. ($44-$66/mt or $40-$60/nt) under current domestic prices. In August, 268,335 mt (license data) of imported plate arrived in the US (both cut-to-length and coiled plate cumulatively) according to US Steel Import Monitoring and Analysis (SIMA) data, compared to 203,555 mt (census data) arriving in July. Major sources of imported plate in the US in August include Russia (16,099 mt of coiled plate and 25,587 mt of cut-length plate), Mexico (12,279 mt of coiled plate and 11,543 mt of cut-length plate), Brazil (8,464 mt of cut-length plate) and Malaysia with 8,465 mt of cut-length plate arriving in August after no recordable levels of Malaysian plate arriving in the US in the last 12 months. As for September, 130,039 mt of plate imports have already landed in the US, as of just September 20.
Furthermore, not only are US domestic plate mills competing with lower-cost import plate currently arriving into the US, but current import offer prices to the US are also considerably below US domestic spot prices. Current Russian offers have fallen about $1.00 cwt. ($22/mt or $20/nt) on the low end since early September and now range from $43.00-$45.00 cwt. ($948-$992/mt or $860-$900/nt) DDP loaded truck in US Gulf ports. Additionally, Brazilian plate offer prices, which were largely in line (and even higher in some cases) than US domestic spot prices just a few weeks ago, have now become extremely attractive in the range of $46.50-$47.50 cwt. ($1,025-$1,047/mt or $930-$950/nt) DDP loaded truck in US Gulf ports. So although the US plate market’s end-use sectors continue to be stable, imports are likely to continue to pressure domestic spot prices for at least the next few weeks, which may again edge slightly lower by early October.