SMU Data and Models
SMU Survey: How Much of 2nd Price Increase Will Stick?
Written by John Packard
January 21, 2016
The vast majority of the respondents to our latest flat rolled steel market analysis believe that the domestic steel mills will be able to collect “some” of the latest round of price increases which range from $20 to $30 per ton.
In our latest assessment of the flat rolled market, we asked whether the domestic mills will be able to collect all, some or none of the January price increase. Seventy-six percent of respondents said that the mills would be able to collect some of the increase, 11 percent thought all of the increase would be collected, and 13 percent thought none of it would be collected.
What Our Respondents had to Say
“ArcelorMittal explained their price increase as follows: “These increases are necessary in order to restore some level of profitability to our business. We have experienced an increase in order entry of products due to a reduction in inventories and the continued strength of the consumer driven industries, automotive and appliances”. That strikes me as a lame reason. And combine that with: the big gap between domestic and foreign, rising imports, and still low capacity leaves me questioning whether the fundamentals are there for this 2nd increase.” Wholesaler
“All or most on crc/galv not so confident about hrc.” Service center
“They will announce a 3rd increase late Jan or Early Feb and that will give them the ability to collect the 2nd increase.” Trading company
“Too much too fast will push customers back to imports &/or drive competition for available tons between domestic producers… either way deflating likelihood of sustained price increases.” Manufacturing company
“Doesn’t appear to be much will be collected but prices are slowly solidifying.” Service center
“The mills need to be very careful here. They are pricing in the effect of preliminary AD/CVD which totaled between $60 and $80/ton. All the domestics are doing here is allowing the foreign V domestic spread to remain constant and are giving away all of their advantage. In short, if they aren’t careful, they will encourage domestic customers to continue buying foreign steel.” Manufacturing company
“I continue to hear from other Purchasing personnel that their business is picking up and they ran their inventories down too much. I have been selling coils to some to supply their needs which is very uncommon.” Manufacturing company
“If mills issues continue to sprout up, then they will get closer to all.” Service center
“$20 out of the $70 announced in the last month.” Manufacturing company
“I don’t believe they collected the first increase yet.” Manufacturing company
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.