SMU Data and Models
SMU Market Trends: Is Demand Easing?
Written by Tim Triplett
March 12, 2018
Is steel demand showing signs of weakening? The year got off to a strong start, but changes in the last three Steel Market Update queries hint at a subtle change in steel buyers’ attitudes.
A bit over half of the respondents to the last three SMU market trends questionnaires reported demand staying about the same through February and into March. While the majority view was of stable demand, a diminishing percentage reported demand improving. Forty-two percent reported improving demand for their products in the Feb. 19 questionnaire, but only 26 percent in the March 5 questionnaire. The percentage reporting declining demand increased from 4 percent on Feb. 5 to 6 percent on Feb. 19 to 8 percent on March 5.
Comments from respondents last week had a more bearish tone:
• “Well, demand WAS improving, now we are afraid to quote.”
• “Automotive build schedules are slumping.”
• “More and more manufacturing is being offshored and it will continue to move in that direction.”
• “Panic gives the appearance demand is rising.”
• “I think demand is steady, yet people are on allocation on the West Coast, with Section 232 limiting what can be done import-wise.”
• “People are buying ahead of what they feel will be a time of rapid price increases. Mills may be in for a surprise as many people stocked up in fourth-quarter 2017 and first-quarter 2018. Mill second-quarter bookings may get pretty lean!”
Demand, as economists note, has an inverse relationship with price. The higher the price, the less people tend to buy. With hot rolled steel prices around $850 per ton and climbing, and steel consumers worried about the effects of the Section 232 tariffs, the demand outlook may not be as bullish in the second quarter.
Tim Triplett
Read more from Tim TriplettLatest in SMU Data and Models
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.
SMU Survey: Mills less negotiable on sheet prices, buyers say
Most steel buyers responding to our market survey this week reported that domestic mills are considerably less willing to talk price on sheet products than they were in recent weeks, but remain open to bargain on plate prices.