Heavy steel' tags expected to rise off cyclical lows sometime'

By Staff -- Purchasing, 6/1/2000

Carbon and alloy steel plate and structural beams pricing was dominated by low-priced imports last year and-contrary to reports by domestic mill salesmen-have yet to start rising this year. Reason: While coiled steel plate from domestic sources costs around $300-$330/ton, imports still are $250-$270. Only the spot-market prices for stainless steel plate and structurals inflated in the first quarter. Steel plate tags last peaked in the spring of 1995, according to both Purchasing Magazine's Transaction Price Service and the Bureau of Labor Statistics' Producer Price Index. They appear to have hit their cyclical nadir last quarter. Heavy structural tags peaked in 1998, fell quickly and look to be bottoming out now. Most market analysts suggest that the long-term (2000-2005) trend for prices of carbon steel plates and structurals is weak to down because of a weaker market ahead and new, more-efficient capacity coming on line. Still, in the short term, steel market momentum will impact 2000 pricing. Purchasing forecasts that market pricing for structurals will rise by 4% and plate tags will be 2.5% higher than the 1999 average. Prices for stainless plate and structural steels, which peaked in 1995 and reached a low in 1999, have come back to 1997 levels already this year. Overall, stainless tags could inflate by 25% or more this year because of a demand surge, the unavailability of lower-priced foreign product (being sold in improving home markets) and high raw material costs (especially nickel).