Carbon Steel Plate Demand and Prices are Tumbling
By Tom Stundza -- Purchasing, 1/14/2009 12:03:00 PM (source: purchasing.com)
Significant declines are being reported in steel plate prices as more and more capital spending projects are being postponed or cancelled. Even oil country goods and wind tower development have fallen off recently. Plate supply has loosened as consumption has fallen; production is down, but consumption is down more. So, at this point this month, cut plate is selling for about 19% below the $1,114/ton price average of December.
Prices for carbon steel plate in coils is down to $880 while cut-to-length plate is down to $900 on the spot market, according to buyers. That’s a cumulative drop at $150/ton in the past month and more than $400 off the peak of last August. Prices for strip mill plate are down, likewise, to the point where 72-inch wide product and thinner (60 inch and 48 inch) are now selling for around $550/ton with some deals reported as low as $520.
Plate demand is falling rapidly worldwide as all industrialized countries and many developing economies are entering deep recession, says analyst John Anton at IHS Global Insights in Washington. A key plate market, construction, is falling very deeply in North America and Europe, he says, and is less positive than expected in Asia. “Heavy equipment manufacturing thus will decline in 2009 and barely recover in 2010,” Anton forecasts.
In the U.S., some mill and service center sources believe the infrastructure stimulus package soon to be presented to Congress by President-elect Barack Obama will spark plate demand. Some say a turnaround will be felt even before the package is passed as steel service centers build inventory in advance of anticipated demand increases. But, there is no agreement between suppliers and market analysts about the size and timing of steel plate demand from infrastructure-stimulus funding.
Some suppliers believe projects will be fast-tracked so that major plate orders will be evident by midyear. However, some analysts and economists caution that engineering and bidding procedures will keep plate-buying programs backed up from six to nine months into the third and fourth quarters. Also, some projects will be held up as states or local governments try to work out what funds come from their coffers and what funds will be available from the federal government
