SMU Data and Models
SMU Market Trends: Demand's Improving
Written by Tim Triplett
June 14, 2020
Steel demand is on the upswing three months after being decimated by government orders to shut down nonessential businesses and stop the spread of COVID-19.
The majority of steel buyers (53 percent) responding to Steel Market update’s market trends questionnaire this past week said they are seeing improvement in demand for their products. Another 38 percent reported that demand is the same/stable. Just 9 percent said they are still seeing declines in demand from their customers—a dramatic turnaround from April when more than 75 percent were suffering from a shocking loss of orders.
Yet respondents’ comments still reflect the market’s continued uncertainty:
“Overall demand is improving, but it’s still a mixed bag.”
“We’ve seen slight improvement from April and May.”
“We’re a little better, but off of low levels.”
“Demand is improving, but very slightly.”
“Improving, but still behind 2019 levels.”
“Construction hasn’t been too bad despite COVID. We are seeing a slight pickup in other segments.”
“Our demand is flat. We are seeing more inquiries, mostly to check competitiveness, but not more orders.”
“Our demand is up roughly 30 percent compared to May.”
“Plate demand is improving at the project/OEM level. Government-funded or subsidized initiatives continue to place requirements directly with the mills, keeping outward pressure on lead-times. Distribution centers remain focused on replenishing only sold stocks. Deliveries shorter than four weeks are available, albeit at a premium.”
Demand has been sufficient to support a modest increase in steel prices. Steel Market Update puts the current benchmark price for hot rolled at $515 per ton, up from a low of $460 per ton in late April. Steel prices in the weeks ahead may be determined more by supply than demand as mills bring idled capacity back online and run the risk oversupplying the market.
Tim Triplett
Read more from Tim TriplettLatest in SMU Data and Models
SMU Survey: Current Sentiment tumbles on tariffs, uncertainty, soft demand
SMU’s Steel Buyers’ Sentiment Indices moved in opposing directions this week. Our Current Steel Buyers’ Sentiment Index dropped to one of the lowest levels recorded in over five years, while Future Buyers’ Sentiment inched higher.
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: Buyers report little change in sheet and plate lead times
Steel buyers report steady lead times for sheet and plate products, a soft-sideways trend we've seen since May.
SMU Survey: Mills remain flexible on pricing, buyers say
The majority of steel buyers responding to our market survey this week continue to say that mills are negotiable on new spot order prices. Negotiation rates have remained high since May.
Service centers: Mill orders improve in July
SMU’s Mill Order Index (MOI) moved higher in July after rebounding the month prior. The shift comes after mill orders declined from March through May.