Market Data

Steel Mill Negotiations: Mills in Control
Written by Tim Triplett
October 29, 2020
Mills continue to control negotiations over hot rolled, cold rolled and coated steel orders as they seek to collect higher prices in a market characterized by extended lead times and tight supplies.
About 86 percent of the hot rolled steel buyers responding to Steel Market Update’s market trends questionnaire this week said the mills are unwilling to deal on hot rolled. That’s up four points from 82 percent two weeks ago. Only 14 percent said the mills are now willing to bargain to secure an HR order.
In the cold rolled segment, 67 percent said mills are not willing to talk price. While still the majority view, that’s down seven points in the past two weeks. The other 33 percent reported some room for price negotiation on cold rolled.
The percentages are similar in galvanized, where 71 percent said the mills are saying no, while the other 29 percent reported mills open to discounts. About 83 percent of those responding to the question on Galvalume reported little room for negotiation as Galv supplies remain especially tight.
Talks have tightened a bit in the plate market, where 55 percent said the mills are now open to negotiations, while 45 percent said the mills are now holding the line on plate. Two weeks ago, more than 70 percent said the mills were willing to negotiate. The plate mills are trying to collect higher prices, though SMU has not seen much movement in the plate price in recent weeks.
Based on SMU’s latest check of the market, the benchmark price for hot rolled steel continues to rise and now averages around $685 per ton.


 
			    			
			    		Tim Triplett
Read more from Tim TriplettLatest in Market Data
 
		                                Chicago Business Barometer improves but still contracts in October
The Chicago Business Barometer’s October reading still indicates a cooling in general business activity despite posting a surprise gain.
 
		                                Drilling activity slows at October’s end in US and Canada
The latest Baker Hughes rig count report showed oil and gas drilling slowing in both the US and Canada last week.
 
		                                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 Steel Demand Index improves but remains in contraction
SMU’s Steel Demand Index remains in contraction, according to late October indicators. Though growth faded at a slower pace, it rebounded from one of the lowest readings year-to-date from earlier in the month.
 
		                                SMU Mill Order Index fell in September
SMU’s Mill Order Index declined in September after repeated gains from June through August. The shift came as service center shipping rates and inventories fell.
