SMU Data and Models
Service Center Spot Prices Peaking?
Written by John Packard
December 22, 2013
Manufacturing companies are beginning to report a fracture within the service center ranks. In our latest steel market analysis conducted last week, 12 percent of the manufacturers reported decreasing spot flat rolled prices from their service center suppliers. This is up from 4 percent measured at the beginning of December which was up from zero percent in early November.
The percentage of service centers reported to be raising prices shrunk from 65 percent at the beginning of the month to 42 percent now.
In the graphic below, we see the history of service center spot sales as reported by the manufacturing companies. We will have to carefully watch spot pricing results as we move into January to see if indeed the bloom is off the rose.
From the service center perspective, spot prices are continuing to rise as 63 percent of the distributors reported their company as raising prices. This is down 13 percentage points from early December results when 76 percent of the service centers were reporting prices as going higher. None of the service centers reported their company as lowering prices.
The continued push toward firmer spot prices represented by 63 percent of the service centers is a net positive for the domestic steel mills as they attempt to keep prices stable and moving higher over the next 30 days. For this reason, amongst others, Steel Market Update Price Momentum Indicator continues to point toward stable to higher pricing over the near term (30 to 60 days).
John Packard
Read more from John PackardLatest in SMU Data and Models
SMU Survey: Sheet and plate lead times flatten out
Sheet and plate lead times held steady this week, according to buyers responding to the latest SMU market survey. This week we saw little change from mid-April levels, with just one product (Galvalume) showing any significant movement.
SMU Survey: More mills willing to deal on sheet prices, less so on plate
Nearly two thirds of the steel buyers who responded to this week’s SMU survey say domestic mills are negotiable on spot prices. This increasing flexibility marks a significant shift from the firmer stance mills held in recent months.
SMU Survey: Sheet lead times ease further, plate hits one-year high
Steel buyers responding to this week’s SMU market survey report a continued softening in sheet lead times. Meanwhile, plate lead times have moderately extended and are at a one-year high.
SMU Survey: Buyers report more price flexibility from mills
Nearly half of the steel buyers responding to this week’s SMU market survey say domestic mills are showing increased willingness to negotiate pricing on new spot orders. This marks a significant shift from the firmer stance mills held in prior weeks.
SMU Survey: Buyers’ Sentiment Indices fall
Current Sentiment Index dropped six points to +42 this week compared to two weeks earlier. It has fallen in every successive survey since reaching a 2025 high of +66 on Feb. 19.