US plate prices flat despite steep import drop

American Metal Market’s price assessment for cut-to-length plate is flat at $48 per cwt ($960 per ton).

Lead times are approximately eight to 11 weeks, market participants said. “Plate is tighter than hot-rolled coil,” one West Coast distributor said.
 
Plate supplies might also be tight because one domestic mill, which already has few spot tons available, is planning to take a three-week maintenance outage in October.

That might be a non-event in a normal market, but the current market is anything but normal, sources said.

One reason why: The US was licensed to import only 28,260 tonnes of cut-to-length plate in June, less than half the 61,171 tonnes that arrived in May and marking the lowest point for plate imports since at least May of last year, according to US Commerce Department data.

The steep drop in imports resulted from the United States on June 1 imposing Section 232 tariffs – 25% in the case of steel – on imports from Canada, Mexico and the European Union.

Canada looks inward
Canada, the largest supplier of foreign plate to the US, was licensed to export only 11,472 tonnes to the US market in June, down 44.7% from 20,741 tonnes in May.

And Canadian supplies might not return to the US market unless tariff regimes change, sources said.

Canada has only one domestic plate mill, Essar Steel Algoma, and is a net importer of plate. Most of Canada’s foreign plate comes from US mills.

Case in point: The US exported 38,839 tonnes of plate to its northern neighbor in April, nearly double the 20,716 tonnes the US imported from Canada that month, per Commerce figures.

Canada has hit US exports of steel products, including plate, with 25% tariffs in retaliation to Section 232. That means US plate exports to Canada could cost Canadian customers as much as $60 per cwt ($1,200 per ton), or $12 per cwt ($240 per ton) more than what might be available domestically.

The result: Algoma could raise prices by as much as $5 per cwt ($100 per ton) and still be competitive against offers from US mills, sources said.

“People are adjusting to tariffs on both sides of the border,” one industry source said. “Canada has excess supply [versus domestic demand] in hot-rolled coil… so Canadian prices are lower in the case of sheet. In the case of plate, it’s the other way around.”

But will anyone else?
Just because Canada might have taken a hiatus from the spot market doesn’t mean that US mills are going to rush to increase prices, sources said.

“There is always the concern that, if it goes artificially too high, then imports can come in even with the [Section 232] duties,” one mill source said.

An East Coast distributor agreed. “Everybody’s concerned about the price going up so much that the imports are attractive even with the 25% tariff.”

And Commerce data indicates that imports from some countries subject to Section 232 tariffs or quotas might already be rebounding.

Italy is licensed to ship 2,199 tonnes of cut-to-length plate to the US this month, according to figures last updated on Friday July 6. That’s over four times more than the 526.7 tonnes Italy was licensed to ship to the US in June.

And South Korea – which has agreed to a quota – was licensed to ship 3,731 tonnes of cut-to-length plate through July 6, up 4.8% from the 3,559 tonnes it exported to the US in June.

Dom Yanchunas, New York, contributed to this report.