SMU Data and Models

Service Center Spot - Pandemic Overrides Capitulation
Written by John Packard
April 19, 2020
If not for the pandemic, SMU would be calling the service centers as being at a point of capitulation. Our expectation would be for the steel mills to announce price increases in the near future. If not for the pandemic.
We have seen both manufacturing companies and service centers reporting spot prices out of the service centers as being lower than two weeks ago. When we find 75 percent or a greater percentage of the steel distributors reporting their company as offering lower spot prices, we normally peg that point as being when service centers are willing/anxious to have the domestic mills announce price increases.
However, we are not in a normal world. With COVID-19 the rules have changed.
Granted, service centers would very much like to see spot steel prices move higher, but the pandemic and the associated demand destruction is creating a market where distributors are over-inventoried and not capable of putting more steel on their floors.
We will have to wait out this market to see what happens next.
Eighty-eight percent of the manufacturing companies responding to last week’s questionnaire reported service centers as lowering spot pricing. We have not seen spot numbers at this level since late second quarter 2019.
Service centers also reported their companies as lowering spot prices to their end customers. Last week 79 percent of the distributors reported lowering prices.

John Packard
Read more from John PackardLatest in SMU Data and Models

Most steelmaking raw material prices decline through June
According to our latest analysis, prices for four of the seven steelmaking raw materials we track declined from May to June. Collectively, these materials declined 3% month over month (m/m) and are down 9% compared to three months ago.

May service center shipments and inventories report
Flat rolled = 57.1 shipping days of supply Plate = 55.7 shipping days of supply Flat rolled US service centers reined in flat roll supply in May, coinciding with declining shipments. At the end of May, service centers carried 57.1 shipping days of supply, according to adjusted SMU data. That’s down slightly from 57.6 shipping […]

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.