Steel Products

Is Your Company Able to Get the Steel It Needs?

April 26, 2018

The number of companies – especially service centers – reporting they have been on allocation or controlled order entry has dwindled over the past couple of weeks. Many companies are reporting extended lead times or an abundance of late deliveries, but no full allocations with their suppliers. The one exception being plate companies, where almost every one is on some form of allocation or controlled entry. One large service center did advise that their company was no longer on allocation and suggested from their view that plate prices may be peaking.

The key part to our question was “…are you able to get all of the steel that you need?” Almost every company we communicated with reports they are able to get what they need.

This afternoon, we spoke with the president of a service center who told us they have had tons offered to them at spot market pricing and they were only able to sell a portion of the tons offered. The rest they turned back to the mill.

We are not hearing of any panic amongst buyers, although there continues to be an expectation that supply will deteriorate over the next few months as foreign imports become even more constricted due to the quotas many believe the U.S. government will insist upon.

Here are some of the comments made to SMU this week in response to our question, “Is your company on allocation with your suppliers and are you able to get all of the steel that you need?”:

• “We are not on allocation, but we’ve had some orders move out from the planned delivery by upwards of three weeks. That said, we have good relationships with our primary suppliers, and they are doing what they can to get us what we need in time.” Manufacturing Company

• “In general, we can get what we need but not at prices customers want to commit to. The only tons that are turning are program tons, and the spot order bookings are very limited.” Service Center

• “We are currently off allocation for June production. May production was our last month of allocation. We are seeing a significant uptick in business on the service center side for tubing as most of the domestic tube mills are running way behind. We are filling the gap and hopefully gaining new business for lthe ong term.” Manufacturing Company

• “We are being held to our agreed contract tonnages, but on spot business can get what we need without too much trouble. We just don’t like the price.” Service Center

• “We are getting 95 percent of what we are asking for. Only a few mills have allowed us to buy to the MAX levels of our contracts.” Service Center

• “We see the plate market coming off allocation this spring and business conditions stay steady.” Service Center

• “Allocation only with plate mills, but we’re getting what we need.” Service Center