SMU Data and Models
SMU Survey: Purchase of Severstal Good or Bad for Your Company?
Written by John Packard
July 24, 2014
Steel Market Update (SMU) began our mid-July flat rolled steel market analysis (survey) on Monday of this week, shortly after Severstal announced the sale of their North American operations. We included questions about the sale both as a group and in industry segments of the survey.
As a group, those responding were of the opinion that steel mill consolidation would result in higher flat rolled steel prices. Sixty one percent of the respondents believe prices will rise while 2 percent were of the opinion that prices would fall. The remaining 37 percent do not believe consolidation will have any direct impact on pricing.
We asked the manufacturing companies responding to our survey if the purchase of Severstal Dearborn by AK Steel would be good or bad news for their company. We found 8 percent of the manufacturing companies reporting it would be good news, 16 percent bad news, and the balance not expressing an opinion on the subject at this time.
We asked the same question regarding the Steel Dynamics (SDI) purchase of the Columbus plant and we found 27 percent responding it was good news, 16 percent as bad news and the balance having no opinion at this time.
We found it interesting to compare the service center responses to those of the manufacturer’s. We found 37 percent of the service centers believed the purchase of Dearborn by AK Steel would be good news for their company. Only 2 percent believed it would be bad news and 61 percent had no opinion at this time.
When looking at the SDI purchase of Columbus, we found 44 percent of the service centers felt it was a good thing for their company and 5 percent thought it was bad for their company. The remaining 51 percent had no opinion at this time.
John Packard
Read more from John PackardLatest in SMU Data and Models
Steelmaking raw material costs mixed through May
According to our latest analysis, prices for four of the seven steelmaking raw materials we track increased from April to May. However, select materials saw a collective 1% decline month over month and are down 4% compared to three months ago.
SMU Survey: Buyers’ Sentiment tumbles as caution increases
SMU’s Buyers’ Sentiment Indices resumed their downward trend this week, erasing the modest recovery seen two weeks ago.
Service centers: Mill orders down further in April
SMU’s Mill Order Index (MOI) declined for a second straight month in April after repeated gains at the start of the year, according to our latest service center inventories data.
SMU Survey: Mill lead times edge lower
Sheet and plate lead times declined across the board this week, according to buyers responding to the latest SMU market survey. While our lead time ranges were unchanged compared to mid-April levels, average production times for each steel product we measure have declined from they were two weeks ago.
SMU Survey: Most buyers say price negotiations back on the table
Domestic mills are largely negotiable on spot prices, according to the majority of steel buyers responding to our latest market survey.