SMU Data and Models
Steel Mills Less Willing to Negotiate Flat Rolled Steel Prices
Written by John Packard
May 1, 2014
Flat rolled steel mills have become less willing to negotiate flat rolled steel spot prices with their customers. During the analysis of the flat rolled steel market conducted by Steel Market Update earlier this week, we found large adjustments in negotiations on hot rolled pricing as well as spot galvanized steel pricing. Cold rolled actually saw a moderation in negotiations while Galvalume remained essentially the same as what we captured at the beginning of the month.
Hot rolled has seen the greatest movement, according to those responding to our twice monthly surveys. The percentage of our respondents, which were reporting the mills as willing to negotiate just over a month ago (85 percent), has dropped to 21 percent. This latest reading is one of the lowest levels seen during the history of our survey and speaks to the strength or resolve of the steel mills as they move to collect all of the increases announced.
In each case, the percentages are telling us that the vast majority of buyers are finding flexibility in negotiations as hard to come by. Our gut feel (although not asked in the survey) is those buyers located in the northern sections of the U.S. and into Canada are finding negotiations more difficult than those in the southern and southeastern section of the country where mill production issues are not weighing on the producing mills in this area of the country.
John Packard
Read more from John PackardLatest in SMU Data and Models
SMU’s April at a glance
SMU’s Monthly Review provides a summary of our key steel market metrics for the previous month, with the latest data updated through April 30.
SMU Survey: Steel Buyers’ Sentiment Indices recover
SMU’s Buyers’ Sentiment Indices both improved this week, reversing the decline seen two weeks ago.
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.