March Plate Price Offers Up $40 to $50 Over February

“Everyone is quoting me $36.50/cwt delivered for March Shipments….” A little further in the same quote the steel buyer made another statement regarding March production, “We are very bullish on plate for 2018 and see the mills at $800 a ton in March (fob mill). If you think prices are high now, wait six weeks and be sick to your stomach.”

SMU went back to the plate buyer to get a clarification regarding March quotes and spot pricing. Here is a small portion of the buyer’s response: “I should have said $36.50 was the last price I paid (spot) for very late February shipments. They are NOT at $ 40.00 unless you’re a 40-ton spot buyer.”

We made inquiries over the weekend to plate steel buyers and learned that most of the offers being made to decent sized service centers were $38.50/cwt-$39.00/cwt ($770-$780 per ton).

One of the large plate service centers told us they have received pricing from ArcelorMittal, SSAB and Nucor for March production and the prices being quoted were all $780 per ton. They did not have current numbers from Evraz, JSW or Algoma. Then we were told, “We have not purchased anything at this price yet, but I am sure we will have to buy some tons at this price. I fully expect another increase to come out in early February. Last price paid for tons was $36.50/cwt. Demand for plate in Q1 should be good. I expect it to be similar or slightly higher than Q1 2017. I actually expect H1 2018 shipments to be higher than H1 shipments in 2017.”

Another steel plate service center told us they had pricing from three of their four suppliers for March delivery and the pricing being provided was $38.50/cwt-$39.00/cwt. “Q1 demand is good and will only get better as we go into Q2. Customer feedback is very positive.”

A fourth plate distributor told us, “I have not purchased too much plate yet. Mills are all in March lead times now, and the asking price is about $38.50 – $40.50 for base gauge A36. The resale market has started to move up, but it is still a $36.50 bottom on resale, delivered. We are getting more than that most places, but that is a bottom number. I can tell you that once you are into March, which everyone is now, the numbers I‘m seeing are pretty firm in the $38.50 – $39.00 range. I can’t speak to Evraz; I don‘t do much with them.  

“I think demand is OK, not great. That is what we really need, some demand. The mills are not really full even with imports at less than 50k tons per month. So, a sustained period of elevated prices will require improved demand. Otherwise we will stay in these silly cycles of spikes and troughs that are driven by short-term movements in input costs and fluctuations in SC inventory levels.”

From SMU’s vantage point, the pricing for February was fairly consistent at $36.50/cwt ($730 per ton). With the latest price increase announcements, we believe the domestic mills are trying to collect higher prices with offers being in the $38.50/cwt to $40.50/cwt range. SMU has not yet documented from our plate buying sources spot sales at the new numbers. We anticipate those will happen in the coming days.