SMU Data and Models

Mill Lead Times Respectable Yet Mills Willing to Negotiate Steel Prices
Written by John Packard
March 6, 2014
Domestic mill lead times continue to be better than they were at this time last year. Hot rolled lead times averaged 3.94 weeks, according to our survey respondents. This is better than the 3.28 week average of one year ago.
Cold rolled lead times were reported to be at an average of 6.08 weeks (4.65 weeks last year), galvanized 5.88 weeks (5.27 weeks last year) and Galvalume 6.82 weeks (6.27 weeks last year).
Earlier this week a service center executive told me that he felt lead times would start to extend as we move out of the excessive winter weather and release pent up demand. Usually with longer lead times we see less willingness by the domestic mills to negotiate and tighter steel prices.
Steel Market Update received a call from a large service center executive earlier today who commented that they were seeing “positive signs” in the marketplace regarding demand and yet steel prices continued to go down.
The domestic mills continue to be receptive to negotiating prices on virtually all flat rolled products. Hot rolled pricing appears to be the most negotiable based on the results of this week’s flat rolled market survey. Following close behind are galvanized, Galvalume and then cold rolled. As you can see by the graphic below, flexibility appears to be the word of the day.
In the real world, SMU is aware of extras and freight as being the two primary areas in negotiation followed by adjustments to base pricing.
Steel prices have been dropping since the middle of January. When looking at hot rolled prices, they peaked the first week of January. Prior to the first week of January we saw prices trending sideways during the second half of 4Q 2013 and prices moved higher during early 4Q. You can see the lack of downward price pressure in the numbers in the graphic below.

John Packard
Read more from John PackardLatest in SMU Data and Models

US Hot Band Now Even Cheaper Than Imported HRC
US hot-rolled coil (HRC) prices fell further relative to imported product this week. Domestic hot band remains cheaper than offshore HRC as US tags continue to sink at a sharper rate than those overseas.

Service Center Shipments and Inventories Report for August
Flat Rolled = 54.1 Shipping Days of Supply Plate = 61.2 Shipping Days of Supply Flat Rolled US service center flat-rolled steel inventories eased back in August with stronger shipments. At the end of August, service centers carried 54.1 shipping days of supply, according to adjusted SMU data, down from 56.1 shipping days of supply […]

SMU Steel Demand Index Inches Up
Steel Market Update’s Steel Demand Index remains in contraction territory despite marginal improvement, according to our latest survey data.
HRC vs. Galv Price Spread Widened This Summer
The spread between hot-rolled coil (HRC) and galvanized sheet base prices widened throughout the summer as hot rolled prices declined faster than those of galvanized.
US Prime Scrap, HRC Spread Narrows Further
The spread between hot-rolled coil (HRC) and prime scrap prices continued to narrow this month, according to Steel Market Update’s most recent pricing data.