SMU Data and Models

Steel Mill Negotiations: No Surprise, It's a Buyer's Market
Written by Tim Triplett
April 5, 2020
Price negotiations between steel mills and steel buyers are wide open, not surprisingly, as companies scramble to win orders in a market disrupted by the coronavirus. More than nine out of 10 buyers responding to Steel Market Update’s questionnaire this week said the mills are now talking price on all types of products.
In the hot rolled segment, 93 percent of the steel buyers said the mills are willing to negotiate prices on HR, up 30 points from 63 percent in early March. In the cold rolled segment, 96 percent reported the mills willing to talk price, up from 87 percent a month ago. In galvanized, 90 percent reported the mills open to negotiation, up more than 30 points from the 57 percent four weeks ago. Similarly, 82 percent said they have found mills willing to compromise on Galvalume prices.
The tone of negotiations in the plate sector has seen relatively little change since mid-February. About 83 percent said the plate mills are now open to negotiations, while just 17 percent said mills are holding firm on plate.
Benchmark hot rolled steel price declined by $40 in the month of March, to an average of $540 per ton, according to SMU’s canvass of the market earlier this week. With steel prices widely expected to continue dropping as social distancing orders stifle commerce, it’s likely to remain a buyer’s market for some time to come.
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 (second example below), visit our website here.

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

SMU Scrap Survey: Current and Future Sentiment tick down
SMU’s Current Sentiment Index for scrap decreased this month, a move mirrored by our Future Sentiment Index, according to the latest data from our ferrous scrap survey.

SMU Survey: Buyers’ Sentiment slips again, future outlook improves
Each of our Sentiment Indices continues to reflect that steel buyers are positive about their present and future business prospects, though that confidence has eased considerably compared to the beginning of the year.

SMU scrap market survey results now available
SMU’s October ferrous scrap market survey results are now available on our website to all premium members.

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 and plate lead times stabilize
Sheet and plate lead times saw minor shifts this week, according to SMU’s latest market survey. Sheet times have inched up over the last month but remain within days of multi-year lows, as they have since May. Plate lead times have bobbed within a tight range for months, hovering roughly a week longer than this time last year.