Steel Negotiations: Mills Begin to Hold the Line

In the hot rolled segment, 48 percent said the mills are now holding the line on price, a big jump from just 7 percent in the last poll. A narrow majority, 52 percent, said the mills were still open to price talks this week, down sharply from 93 percent two weeks ago.

Prices are nonnegotiable on cold rolled steel, according to one-third of respondents, up from just 5 percent last month. The other two-thirds said the mills are still flexible in cold rolled negotiations.

In galvanized, 38 percent said the mills are now standing pat on price, versus just 8 percent in mid-June. Sixty-two percent said the mills are still open to negotiation to close the deal on galvanized orders, down from 92 percent two weeks ago. For Galvalume, respondents said, it’s a 50-50 proposition to find a mill willing to talk price in the current environment.

Negotiations for plate orders have actually continued to loosen as nearly nine out of 10 buyers said the mills are flexible on plate prices today.

SMU will keep a close watch on the tenor of negotiations in the coming weeks for signs of how likely the mills are to collect higher 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.