CRU: U.S. Plate Volumes Up, Prices Down

By CRU Prices Analyst George Pearson

The U.S. plate market has, up to this point, seen prices fall on a slow downward trend. Plate has not been as exposed to the automotive-led manufacturing shutdown, which had allowed prices to only slowly fall by $61 /s.ton since the late January cycle peak. Current prices, though, reflect an increase in both the number of transactions as well as overall volume booked. Higher volume has led to lower prices as this week’s assessment fell by $25 /s.ton w/w to $579 /s.ton, the lowest level assessed since December 2016.

The German plate price fell back by €4 /t to €537 /t. We still expect there to be further downside for German plate prices with the decrease in coil. The Italian plate price fell by €2 /t w/w to €478 /t. CIS slab bookings rose by $10 /t to $330 /t FOB last week, but are still at least $30-40 /t lower than would be expected with Italian plate prices at this level.

China plate prices softened by RMB10 /t w/w together with the dampened sentiment in the steel sector, mainly due to uncertainty caused by volatile oil prices and slowed speculative activities in the futures market. Plate inventory at both the traders’ and mills’ declined by 3 percent w/w, while weekly output increased by 6 percent. The increase of output was mainly due to the continuous negative margin of sheet products, which led the mills to produce more plates. That being said, demand from downstream sectors showed positive signs with shipbuilding orders increasing by 6.5 percent during the first quarter of 2020. We therefore expect price to find support from steadily improving demand in the short term, with the increasing output being a main downside risk.

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