Final Thoughts

The Brandenburg plate mill is slated to have an annual capacity of 1.2 million tons. If all goes as planned, it will probably take Nucor most of this year to ramp to 60% or 70% capacity.

The news also comes as prices are still lacking direction. They have been largely stable over the past three to four weeks. But there are differing accounts from sources on how strong plate mill order books are.

SMU’s most recent check of the market on Tuesday, Jan. 3, placed plate prices between $1,400–1,480 per ton with an average of $1,440 per ton FOB mill east of the Rockies – unchanged week-on-week (WoW), according to our interactive pricing tool.

“We expect little room for negotiations because the mills are telling us that their order books are solid,” said a source.

Another source agreed saying “Nucor shouldn’t be lured into dropping prices just to drop prices because a smaller contributor in the market is taking a shot.

“Nucor Steel will be the price setter and plate quality standard in the marketplace,” the source added.

But the sentiment is not the same across the plate market.

“Nucor still needs demand to pick up in the US, or they are just adding to the problem (pressure) we already have,” said another source. “There aren’t enough orders right now to keep mills full, so they have had to lower pricing at times to try to attract orders. This pressure will only increase when Brandenburg starts to ramp up production if demand is flat.”

“It is possible that what we see in plate this year is what hot-rolled saw in 2022,” a source said. “I am not a doomsday person, but there is still a lot of opportunity margin to give back before the mills get back to normal margins.”

Nucor has been touting this mill for some time, and it’s because it will be able to make plate in several sizes and specs others can’t. The mill will be one of very few mills globally, and the only one in the US, capable of manufacturing at scale the heavy-gauge plate critical for monopile foundations and offshore wind farms.

There’s no doubt it will benefit from some of the major infrastructure spending coming down the pipeline, particularly $300 billion for clean energy development and climate programs included in the Inflation Reduction Act. Nucor estimates that the need alone will add roughly 7.5 million tons of new steel demand to the domestic market.

If any of that gets delayed or held up by red tape in Washington, Nucor clarified that its mill can produce 97% of plate products consumed domestically and is centrally located in the largest steel plate-consuming region in the US.

And although sources aren’t in agreement on where the plate market is headed in the near-term, the fact that there are such widely differing opinions in the market points to the fact that most are waiting to see where Nucor will offer plate when it opens it March order book.

The Tampa Steel Conference

Now that we’ve made it to 2023, it’s another reminder that the Tampa Steel Conference is just around the corner, and it’s time to register and make your travel plans.

The event will be at the Tampa Marriott Water Street hotel again this year. Mark your calendar for Sunday-Tuesday Feb. 5-7. More than 200 of you have registered already. We’re on track to have 400-500 attendees.

You can learn more about the agenda, explore networking opportunities, and register here.

By David Schollaert, David@SteelMarketUpdate.com