Nucor aims to keep plate prices unchanged

The announcement indicates that Nucor will keep plate prices at $1,075 per short ton (st), the price it specified in early July. Recall that Nucor slashed plate prices by $125/st on July 1.

There had been speculation that Nucor might lower plate prices. But following a round of sheet price hikes, some wondered if Nucor would instead seek to keep plate tags flat.

Note that the sheet hikes resulted in hot-rolled coil prices inflecting up slightly after declining for the better part of the year.

SMU’s plate price stands at $1,020/st on average, unchanged from a week ago. Our HR price is at $640/st on average, up $5/st from a week earlier. That information comes from our pricing archives, which you can find here.

Market reaction

There was no real price consensus with the market. Some expected a sideways move, while others figured Nucor would cut prices again after slashing them by $125/st last month.

What all seemed to agree with was that regardless of pricing, nothing would entice buying.

And based on multiple market sources, that was the driving rationale Nucor provided customers after keeping tags flat with the opening of its September order book.

“They don’t believe a decrease would change demand or draw in buyers,” said a service center executive. “All it would do is piss people off and devalue inventories.”

A prudent call, sources told SMU.

“They are selling all products below their book’s prices,” said a manufacturing executive. “They could have shocked the market and gone down big again to make their price sheet relevant or go lateral and keep negotiating off the book price.”

A third source said the delay might have been indecision on what to do with prices. “They were probably sitting in Charlotte contemplating what to do – sort of a damned if they do and damned if they don’t scenario at the moment.”

What may be of greater interest is the apparent delay in opening the September order book and its pricing letter. With just three-and-a-half weeks until September, Nucor is still notifying buyers of August availability, a shift from the typical six-week lead time on order books.

It aligns with recent comments from Nucor’s Q2 earnings call that its Brandenburg, Ky., plate mill was operating at around 20% capacity. Additionally, the company said it was no longer focused on volume, instead focusing on the mill’s capabilities due to soft market conditions.

Regardless, sources agreed that lead times not just from Nucor but across North American mills are between 2-3 weeks, with some noting the turnaround for small orders can be as quick as one week.

To keep track of the latest mill price increases and decreases, visit SMU’s price increase calendar.