We’ve seen several sheet price hike announcements from mills over the past couple of months, to the tune of $160 per ton ($8.00 per cwt) since late November. This week alone we’ve seen at minimum Cleveland-Cliffs and ArcelorMittal officially increase spot prices for steel sheet by at least another $50 per ton ($2.50 per cwt).
Cliffs noted that its target base price for hot-rolled coil was $800 per ton.
SMU’s hot-rolled coil price now stands at $740 per ton on average, up only $5 per ton from last week. However, this is up by roughly $125 per ton since the slew of price hike announcements began around Thanksgiving, when prices were averaging $615 per ton, according to SMU’s pricing tool.
One thing to note: there was little in the way of formal pricing notices when tags were climbing at a record pace in 2021. We’ve seen this approach of announcing price hikes take hold as mills sought to stop the bleeding after prices fell by nearly $900 per ton over roughly six months in 2022.
On the plate front, SSAB Americas announced yesterday it plans to increase plate prices by at least $60 per ton ($3 per cwt).
What makes the latest plate price notice surprising is that it’s the first of its kind in quite some time. Plate prices have been under pressure since last summer when HRC began to erode, and have been steadily declining ever since.
Most recently, Nucor told its customers on Dec. 28 that it would keep plate prices unchanged with the opening of its February order book. However, this came on the heels of a sharp decrease just a month earlier.
Nucor had lowered plate prices by $140 per ton ($7 per cwt) in November for its January order book, and by $120 per ton in September for its November order book.
SMU’s plate price stands on average at $1,430 per ton. It has been roughly at that level since early December, according to our pricing tool.
One thing to keep in mind is that SSAB Americas pricing before its announcement was at or near the bottom of our range, at roughly $1,400 per ton ($70.00 per cwt). SSAB’s increase brings them slightly below Nucor’s current price point (SMU’s top end).
It will be interesting to see what Nucor does later this month with the opening of its March order book. Will Nucor follow SSAB’s move and announce a plate increase of their own, or will it hold?
We’ve spoken with several buyers this week – mainly service center and original equipment manufacturer (OEM) executives – to get a gauge on sentiment, and whether they think the latest plate price hike will stick. There are diverging outlooks. Many are eager to see what Nucor will do next.
“I felt an increase coming in Q1,” said a source. “Nucor will most likely follow. I’m guessing up to $40-50 per ton. We shall see.”
“It will be interesting to see if Nucor follows. Maybe this will change their strategy,” said another source, referencing Nucor’s most recent trend of price cut notices.
But a third source said the news was a “head-scratcher,” adding that it’s hard to understand the motivation to increase prices when plate demand is steady.
“The mills have printed money for two years. Maybe they don’t want to give anything back,” the source said. “Demand has fallen off a little but is still OK.”
“It will be interesting to see what Nucor does, although their price was at the top of the range, so maybe they sit tight,” the source added.
Another source said they were intrigued by SSAB’s increase because they still see plate pricing under pressure. “With Brandenburg (in Kentucky) starting up later this year and Algoma adding capacity, it hasn’t helped market sentiment as it relates to pricing. But the market has been steady for the last month or so. Demand is decent for our heavy plate products … not great but OK.”
Prior to SSAB’s increase notice, reports of more aggressive plate offers were confirmed with multiple sources, as a mill or two were concerned they were being outsold. But with OEM demand not yet taking off, sources have speculated the plate market would need infrastructure spending to start in earnest to see the market move.
What’s to come on pricing is anyone’s guess. Will plate mills remain willing to negotiate to book business, or will the potential of more increases to follow SSAB kickstart a new cycle of buying? More importantly, will the recent plate price hike find support?
The Tampa Steel Conference
We recently announced several new speakers and a final agenda for Tampa Steel – a conference SMU does every February together with the Port of Tampa Bay. We’ll have senior mill executives from across North America, as well as leading experts on everything from steel prices and logistics to energy and geopolitics.
We’ll have more detailed Tampa Steel conference updates in the coming issues. Keep a lookout for those. And be sure to be a part of the conversation and the networking, too.
You can learn more about Tampa Steel and register here.
By David Schollaert, David@SteelMarketUpdate.com
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