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Plate market outlook turnaround unlikely this year: as demand scrapes bottom, suppliers of carbon steel plate cling to hope for recovery in 2004.

Article Excerpt
Many producers and distributors of carbon steel plate expect the market to remain lethargic for the rest of this year. Some industry observers are more optimistic, however, that next year will bring both stronger consumption and pricing levels.

Even now, despite weak demand and overcapacity, several plate producers are taking steps to firm up prices, which have fallen to historic lows. Two $10-per-ton price increases were announced, one to take effect July 1 and the other Sept. 1. Opinions are mixed as to whether buyers will accept these increases.

Overall, plate demand through the first five months of 2003 was down 5 to 10 percent from the same period last year and well off the peak of 1998, says market analyst Christopher Plummer, managing director of Metal Strategies Inc., West Chester, Pa. He forecasts that plate consumption will total 9.09 million tons this year, compared with 9.67 million tons last year and 13.41 million tons in 1998.

"Demand is terrible and it is going to stay terrible until capital spending recovers," says consultant Charles Bradford of Bradford Research, New York. Manufacturing operating rates, now averaging about 75 percent, must rise to at least 80 percent before companies will consider any capital projects. "The idea that low interest rates will help [spur spending] is wrong. People have to need a facility first," he says.

Jochen Seeba, vice president of operations for Ranger Steel Supply Corp., Houston, shares Bradford's pessimism about the near-term future of the plate market. "Demand is very, very poor. There are no signs of a pickup at all. First people have to start building things again. They have to...

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