SMU Data and Models
Steel Mill Negotiations: Mills Less Willing to Negotiate
Written by John Packard
March 20, 2016
Buyers and sellers of flat rolled steel report to Steel Market Update whether the domestic steel mills are willing to negotiate pricing on hot rolled, cold rolled, galvanized and Galvalume steels. The less willing the mills are to negotiate prices the stronger the market (and potentially the higher prices go from here).
Hot rolled negotiations have been in a state of fluctuation up until recently. SMU had been reporting weakness in the HRC markets due to the energy, large equipment and agriculture related market segments which have been weaker than the rest of the steel using segments of the economy. Even so, with the reduction in supply due to the closure of the steelmaking operations at USS Granite City, USS Fairfield and AK Steel Ashland coupled with results in the HRC trade suit, has given the mills new hope in being able to tighten the HRC markets and raise prices. In the graphic below you can see that the percentage of respondents reporting the domestic mills as willing to negotiate HRC prices has dropped from 82 percent in the middle of February to 46 percent this past week.
Cold rolled percentages have shown a strengthening market with only 13 percent of our respondents reporting the mills as willing to negotiate CRC pricing.
Galvanized is another product where the graphic is self explanatory as the percentage of respondents reporting the mills as willing to negotiate has dropped consistently since early December 2015.
Galvalume is the one product where we have seen a change in those reporting. However, we are taking the data with a grain of salt on AZ due to the smaller number of respondents we have compared to the other products. We will watch this one carefully in the coming weeks.
A side note: The data for both lead times and negotiations comes from only service center and manufacturer respondents. We do not include commentary from the steel mills, trading companies or toll processors in this particular group of questions.
To see an interactive history of our Steel Mill Negotiations data, visit our website here.
John Packard
Read more from John PackardLatest in SMU Data and Models
May service center shipments and inventories report
Flat rolled = 57.1 shipping days of supply Plate = 55.7 shipping days of supply Flat rolled US service centers reined in flat roll supply in May, coinciding with declining shipments. At the end of May, service centers carried 57.1 shipping days of supply, according to adjusted SMU data. That’s down slightly from 57.6 shipping […]
Survey says: Market hit with another blast of tariff whiplash
If you’re feeling a sudden jerk and a case of tariff whiplash coming on, you’re not alone.
SMU flat-rolled market survey results now available
SMU’s latest steel buyers market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the pricing and analysis tab and look under the “survey results” section for “latest survey results.” Past survey results are also available under that selection. If you need help accessing the survey results, or if […]
SMU Survey: Steel Buyers’ Sentiment sinks to near pandemic levels
SMU’s Steel Buyers’ Sentiment Indices moved in opposing directions this week. Our Current Steel Buyers’ Sentiment Index sharply fell to one of the lowest levels recorded in five years, while Future Buyers’ Sentiment marginally improved.
SMU Survey: Mill lead times tick higher after late-May lows
All five of the averages for sheet and plate mill lead times tracked by SMU extended moderately this week, according to buyers responding to our latest market survey.