CRU: U.S. Plate Prices Fall to New Cycle Low

Price momentum of the plate market has taken a negative turn for producers as prices now are well below price levels seen in late July when mills initiated the first of two $40 /s.ton price increases. Demand for plate remains limited while inventories at service centers appear to be at adequate levels. While this market appears in balance, demand is set to slow seasonally while costs have recently fallen in the form of lower scrap prices. Due to this combination and falling prices, buyers have been able to negotiate for lower plate prices.  

The Italian plate price is up slightly this week, though still lower on a two-week period, while in Germany the plate price continues its long-established downward slide. Latest prices are €550 /t in Germany and €512 /t in Italy. A lease agreement has been signed in the past week for Huta Częstochowa, which would see the plant restart in October, having been idled for the past several months. When it was operating it was running at a low utilization level, though the restart plan envisages ramping up the operation to maximize output and generate cash. It is not clear that the European plate market needs more supply at this stage.

In China, plate prices fell by RMB20 /t w/w. After the issuance of the official document about supply cuts for this winter heating season, market sentiment turned bearish from last Thursday given the document suggested weaker steel supply cuts during this period. It reflected in the decreasing steel prices in both physical and future markets. Although there were supply restrictions in regions around Beijing before the National event, plate output went up slightly over the past week. Given the construction activities were also required to halt, traders failed to boost sales by cutting prices as reflected by an increase in traders’ stocks. Looking forward, we expect plate prices to stay at the current level in the next week.

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