SMU Data and Models
Steel Buyers Seeing Steel Mills as More Willing to Negotiate Spot Steel Prices
Written by John Packard
February 2, 2017
Average flat rolled lead times (the amount of time it takes a steel mill to produce a new order placed today) have begun to shrink which is causing steel mills to be more receptive to negotiating flat rolled spot steel prices based on those responding to this week’s flat rolled steel market trends analysis survey.
In the middle of January only 17 percent of the respondents to the mid-January market trends survey reported the domestic steel mills as willing to negotiate spot hot rolled pricing. Much has changed over the past two weeks as this week’s survey has 54 percent of the respondents reporting the mills as willing to negotiate HRC steel prices. The last time we saw more than 50 percent of the respondents reporting the mills as willing to negotiate was in the middle of October 2016.
Twice as many cold rolled respondents reported the mills as willing to negotiate spot CRC prices compared to mid-January. We had 41 percent of our respondents reporting the mills as willing to negotiate vs. the 21 percent measured during the middle of January.
Galvanized was very much the same as cold rolled in that 43 percent reported the mills as willing to negotiate this week vs. only 22 percent in mid-January.
The response on Galvalume found 33 percent of the respondents reporting the mills as willing to negotiate vs. 11 percent in mid-January.
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
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