Steel Prices Face Further Downward Pressure As Extra Supply Looms
2022-11-18

American steel giant Nucor announced no change in discrete plate prices for December, meaning they will hold at $1,620/st. This marks the second consecutive month that Nucor kept prices flat after the company lowered them by $120/st in mid-September.

As flat rolled steel prices remain in free fall, plate prices continue to diverge from the larger trend. Since plate prices peaked nearly seven months ago, they have so far declined only 14.76%. For comparison, HRC prices fell a whopping 52.69% during that same period.

For months, buyers have complained about the widening spread between the two commodities. Until HRC prices peaked in October 2021, plate prices averaged around $107/st over HRC. However, that average has since ballooned to almost $600/st, with the current spread sitting at an all-time high of $1,014/st.

New Brandenburg Mill to Test Sideways Plate Trend

The sideways trend will face its next major threat as new capacity comes online. Indeed, operations at Nucor’s Brandenburg, Kentucky plate mill officially began on October 20. At full capacity, the mill can produce up to 1.2 million short tons per year. That said, operations remain in their early stages, and it is still unclear when the mill will reach maximum production.

According to the company, the mill will primarily supply the renewable energy sector, providing plates for solar and wind energy projects. Nonetheless, as the mill begins to add supply to the plate market, the sideways price trend will face increasing downside pressure. Thus far, steel prices have resisted any meaningful decline. However, this new mill could prove the tipping point.