Market says cutting interest rates will spur stalled domestic plate demand

“I think until interest rates drop, we’re going to stay here,” said a West Coast-based service center associate.  

The same source noted Nucor’s recent price decisions. On Monday, the steelmaker held its weekly consumer spot price for hot-rolled coil unchanged. And on Thursday, the company’s Plate Group notified customers it was maintaining prices set seven months ago in March.  

“Even Nucor Plate Group kept its pricing steady this morning, with the same for HRC this week. I just don’t believe there is a lot the mills can do to stimulate business. It’s going to take the Federal Reserve,” he said.  

Other plate market participants also expect an official rate cut by the Fed to be the “x-factor” that will start its engine.  

An East Coast sales associate stated that the plate market remains a daily battle for sales and hopes a rate cut will make each day less of a struggle of “scratching and clawing for what we can get.” 

“Plate demand is still soft, not sure what may spur demand for the balance of the year. But things can change in a hurry. Maybe a couple decreases in interest rates may help? There are lots of monies on the sidelines waiting to be let. $985 per short ton fob mill seems to be in there,” the East Coast source said.  

Yesterday, SMU saw plate prices in the market decrease by $25/st compared to the prior week, bringing this week’s range to $930-1,040/st with an average price of ~$985/st. 

Meanwhile, two separate sources in the Midwest said this week’s sales were not improving.  

One of which, a salesperson at a large service center, was unhappy to admit that sales of domestic plate remained “slow.” 

“It’s slow. No big projects are going to get this over the line for us because we are not a job shop. We sell to our customers who consume steel at the rate of their customers,” he commented.  

A second Midwestern service center operator said, “Plate is ok. Nothing is changing. Demand is a steady, slow stream, and I’m hoping it improves now that summer is mostly over. I think we’ll see prices hold because things usually pick up after the summer, so everyone will resist lowering prices, and I feel that is what mills are waiting for.” 

He also believes that lowering interest rates remains a powerful tool that could spark demand.  

“Just a small decrease in the rates could signify a pivot,” he noted.  

In the equivalent week of 2024, prices of domestically produced plate averaged ~$950/st. The SMU interactive pricing tool allows you to assess historic steel plate prices, find it here.

All prices are ex-works, FOB, domestic mill, spot market prices unless otherwise noted.