Service Centers
Flat Service Center Spot Market Continues
Written by John Packard
March 25, 2013
Manufacturing companies continue to report negligible support for higher spot prices by the distribution segment of the flat rolled industry. In our most recent survey, the vast majority of manufacturing companies reported their service center suppliers as providing stable spot prices (75 percent). Only 7 percent were reporting higher spot prices and those reporting lower spot prices out of their suppliers rose a couple of points to 18 percent.
Service centers agreed with the assessment made by the manufacturers with 75 percent of the distributors reporting stable spot prices, 9 percent reported lowering prices and 16 percent reported their spot prices as being higher. As you can see from the graph below the trend for raising prices which began in the 4th quarter 2012 has been steadily declining even though the domestic mills have announced five (5) price increases during this time period.
A number of service centers left behind comments regarding their spot market pricing and the reasons why their company was pricing product in a specific way:
“We are attempting to maintain pricing but the competitive landscape has forced our company to match sub-market pricing in many territories just to simply maintain market share. Plain and simple there is too much steel out there right now.”
“Lowering [prices] or keeping the same. What ever gets the order!! not enough in the schedule to turn an order away.”
“In many cases, we have to decide if we want the order at the cheap price customers are being quoted.”
“Where order size and delivery make it possible. We are taking advantage of manufacturing’s quest for ever increasing inventory turns.”
John Packard
Read more from John PackardLatest in Service Centers
Steel pricing pressure squeezes Reliance’s Q2 earnings
Reliance Inc. said a faster-than-expected decline in carbon steel prices offset higher shipments in the second quarter.
June service center shipments and inventories report
Flat Rolled = 60.9 Shipping Days of Supply Plate = 59 Shipping Days of Supply Flat Rolled US service center flat-rolled steel supply remained high at the end of June at 60.9 shipping days of supply, according to adjusted SMU data. This translates to 3.05 months of supply in June. At the end of May, […]
Reliance to buy certain assets of Mississippi toll processor
Reliance Inc. has reached an agreement to buy certain assets of Ferragon Corp.'s FerrouSouth division, a toll processing operation based in Iuka, Miss.
Steel Warehouse set to invest $20M in Tennessee expansion
Steel Warehouse plans to expand in Jefferson City, Tenn., with an investment of ~$20 million.
SMU Community Chat: Back to building with Triple-S CEO Gary Stein
Looking out over the American economy, Triple-S Steel Holdings CEO Gary Stein believes what is required doesn’t fundamentally have to do with government policy. “Rather, it’s a mind shift.”