SMU Data and Models

SMU Market Trends: Near Unanimity on Price Increase
Written by Tim Triplett
December 21, 2017
More than nine out of 10 respondents to Steel Market Update’s latest market trends questionnaire see steel prices heading higher in the first quarter. Seven percent say they see no clear direction for prices. Virtually no one expects prices to decline in the wake of price hike announcements by the major mills earlier this month. Whether the mills are able to collect all or part of their increases will be determined by market forces in the coming months.
Following is a sampling of steel buyers’ comments:
• “Fundamentals are all pointing toward a higher market for Q1.”
• “Prices are going up. The only question is how high and for how long?”
• “Not sure if the high for HRC base will be $700 or $750 for 2018.”
• “Raw material costs continue to slowly increase (iron ore, coking coal, zinc) and now the rise in scrap will push prices up in the first quarter.”
• “Hot rolled will lead the way—tied to scrap and not much in the way of import competition.”
Not every respondent feels positive about the price trend:
• “Knowing there have already been price increases announced, I just don’t know how they are justified. I don’t think they will hold.”
• “Mill prices are going up. Service center selling prices are not going higher.”
• “The continued threat of Section 232 and the circumvention ruling on coated products points to a very protectionist government, which will lead to a short-term price gain for the mills, but longer-term pain.”

Tim Triplett
Read more from Tim TriplettLatest 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.