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Plate's prospects: bright but tight: looking at the steel plate market, one would never guess the U.S. economy is going through a serious economic downturn.

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"PLATE IS A RED HOT ITEM, and I don't see anything in the market dynamics that would change that," says John Ferriola, chief operating officer for steelmaking operations at Nucor Corp., Charlotte, N.C. Demand should remain strong both domestically and internationally, he adds, echoing other suppliers.

Tom Endres, vice president of procurement for Ryerson Inc. in Chicago, says the market is so tight, most carbon plate mills have customers on some sort of controlled order entry or allocation. "And I don't see the market easing any time soon."

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"Of all steel products, plate is probably the strongest market," says Bill Jones, president of O'Neal Steel Inc. in Birmingham, Ala. With demand sky high and domestic supply limited by a lack of imports and increased exports, "pricing is in a territory that we haven't seen before. It is unprecedented."

Plate demand has been strong for about five years, with a couple brief periods of slowness, such as the second half of 2007 when service centers adjusted their inventories, says Dan Miksta, vice president and general sales manager for SSAB North American Division (formerly IPSCO Inc.).

Analyst Christopher Plummer, managing director of Metal Strategies Inc. in West Chester, Pa., forecasts that total U.S. plate shipments will reach 12.56 million tons this year, up 9 percent from 11.52 million tons in 2007, with the largest increase (11.5 percent) coming from cut or plate mill plate. While market growth may moderate in 2009, he expects shipments to remain higher than in 2007, which was a very good year for plate sales.

Ron Whitley, president and chief operating officer of Ranger Steel Supply LP in Houston, noticed a slight slackening of demand in July. He is uncertain whether to blame it on a typical summer slowdown or customers' reaction to the high steel prices.

With recently announced price increases for August, domestic plate prices will approach $1,500 a ton, nearly double the $820 level at the beginning of the year, says Scott Montross, vice president and general manager of Evraz Inc. NA (formerly Oregon Steel Mills) in Portland, Ore.

"Prices are being pushed not only by supply and demand, but also the rising cost of steelmaking inputs," says Mark Breckheimer, executive vice president of Namasco Corp. and president and chief operating officer of its Primary Steel subsidiary in Middletown, Conn.

Costs for scrap, iron ore, coke, freight and energy are likely...

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