SMU Data and Models

SMU Market Trends: It’s No Secret Prices are Rising

January 21, 2018

Most steel buyers agree that prices are on the increase, it’s just a question of how high and how fast. About 92 percent of the respondents to Steel Market Update’s latest market trends questionnaire concur that steel prices are heading higher, while the remainder say they see no clear price direction.

Following are some of their comments:

“I believe we are headed higher, but the market is not as strong as recent price announcements would suggest.” Service Center/Wholesaler
“All ‘drivers’ are pointed upward, but if scrap retreats in February or March, the upward movement of prices will be tested.” Steel Mill
“Clearly input costs are rising and restrictions on trade will force prices to continue to rise.” Trading Company
“We’re waiting on Section 232.” Manufacturer/OEM
“Mills don’t know when to stop. The continued delay on Section 232 helps the mills. Now Trump has another three months to decide, so imports will be limited until he makes the final decision.” Manufacturer/OEM

Rising prices don’t necessarily ease the competitive pressures. Nine out of 10 service centers say they are passing the mill price hikes along to their customers, while 10 percent say they are keeping prices the same. As one service center executive observed, “There’s lots of margin pressure as some service centers are not yet raising prices.