SMU Data and Models

Steel Mill Negotiations: Pricing's on the Table
Written by Tim Triplett
May 9, 2019
With steel prices moving down or sideways and demand softening in some markets, it’s no surprise that most mills are willing to talk price to win business in the current environment. Eight out of 10 of the flat rolled steel buyers responding to Steel Market Update’s questionnaire this week report that prices are in play on hot rolled, cold rolled and coated steels. As seen by the upward slope of the green bars in the chart below, negotiations on steel products have been loosening up since March.
About 89 percent of respondents said the mills are open to price negotiations on hot rolled, up from 86 percent two weeks ago. Just 11 percent said the mills are currently holding the line on HR.
In the cold rolled segment, 83 percent now report the mills open to price negotiations, up from 73 percent two weeks ago. Just 17 percent report current cold rolled prices as firm.
In the galvanized sector, 83 percent said the mills are flexible on price, a big jump from just 68 percent in the last poll. Just 17 percent report that galvanized prices are now nonnegotiable. Nearly the same percentage said the mills are now willing to talk price on Galvalume as well.
Even negotiations on plate have loosened a bit, with 60 percent of buyers now reporting some flexibility in plate prices.
Note: SMU surveys active steel buyers twice each month to gauge the willingness of their steel suppliers to negotiate pricing. The results reflect current steel demand and changing spot pricing trends. SMU provides our members with a number of ways to interact with current and historical data. To see an interactive history of our Steel Mill Negotiations data, visit our website here.

Tim Triplett
Read more from Tim TriplettLatest in SMU Data and Models

SMU Survey: Buyers’ Sentiment rebounds from multi-year low
Both of SMU’s Steel Buyers’ Sentiment Indices edged higher this week. Current Sentiment rebounded from a near five-year low, while Future Sentiment rose to a two-month high

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.

SMU Survey: Sheet lead times pull back after early-June blip, plate holds
Following the uptick seen two weeks ago, lead times eased this week for all four sheet products tracked by SMU, while plate lead times held steady, according to this week’s market survey.

SMU Survey: Pricing power abruptly shifts to steel buyers
The majority of steel buyers responding to our latest market survey say domestic mills are more willing to talk price on sheet and plate products than they were earlier this month. Sheet negotiation rates rebounded across the board compared to early June, while our plate negotiation rate hit a full 100%.

Service centers: Mill orders down marginally in May
SMU’s Mill Order Index (MOI) declined for a third straight month in May, but only marginally.