Steel Products
SMU Survey: More Service Center's Supporting Spot Price Increases
Written by John Packard
August 9, 2013
Service centers continue to raise spot flat rolled prices to their end customers, according to our most recent steel market survey. Seventy seven (77) percent of the service centers responding to our early August questionnaire advised their company as raising prices compared to two weeks ago. The remaining distributors reported keeping prices the same.
The 77 percent support level ties the highest level reported for this year and is the highest level of price support seen over the past 5 quarters. Support for higher spot prices began in earnest during the middle of June following price increase announcements made by the domestic mills in late May and again in the middle of June.
Manufacturing companies confirmed the higher percentage of service centers raising prices as 52 percent reported higher spot price offers from their distributors. This is an increase of 10 percent from what was reported in the middle of July. It is also the highest percentage reported for both this calendar year and over the past 5 quarters.
Service centers left a few comments on the subject during the survey process:
“Raising prices when and where possible based on based on customer’s requirements of quantity, duration and delivery. Passing on an announced price increase is very difficult to the end user especially when most realize these increases are not demand driven but more desperation driven (quarterly losses) Nevertheless, most savvy businessmen realize you can’t stay in business forever if you keep bleeding cash.”
“We having more success each week, but there are still service centers out there who need to wake up and understand the window of opportunity is only open for so long.”
“The prices are erratic and we just try to get last look and the order . Relationships are important !”
“No support for plate increases.”
“This week we are finally able to raise prices.”
John Packard
Read more from John PackardLatest in Steel Products
CRU: EC to toughen steel safeguards
The European Commission proposes cutting its steel import quota by almost half, with volumes exceeding the limit facing 50% duties. The region’s steel industry welcomes the move, while other steel-producing nations fear the consequences. CRU published an insight before this announcement, noting that more restrictive trade policy could significantly raise the cost of marginal supply […]
US and Canadian rig counts stabilize
US counts continue to hover just above historic lows, while Canadian figures remain comparatively healthy.
Plate market sources critique mill hikes amid current market conditions
Following spot market plate price increase notices issued by domestic mills this past week, participants are contemplating the rationale behind the increases and whether they will stick. Some sources anticipate that current market conditions will shift in November and believe the increases may set a new "pricing floor."
Oregon Steel Mills lifts plate prices by $60/ton
Oregon Steel Mills has joined other producers in announcing a price increase of at least $60 per short ton on steel plate.
CRU: Construction of pilot plant for green steel process starts
Voestalpine and partners have begun building an industrial-scale Hy4Smelt demonstration plant in Linz, Austria, which they hope will become key in the decarbonization of steel.