SMU Data and Models

Steel Mill Negotiations: More Buyers Pushing Back
Written by Tim Triplett
October 14, 2021
Since this time last year, mills have been in the driver’s seat when it comes to steel price negotiations. With demand exceeding supplies – and with buyers more concerned about finding steel than what they had to pay for it – mills have basically been able to steer prices wherever they wanted. That appears to be changing, though, as the latest Steel Market Update negotiations data suggests buyers are no longer just along for the ride.
SMU asks buyers every two weeks if mills are willing to talk price on spot orders. Around 40% of hot rolled buyers responding to this week’s survey said mills are now open to negotiating – which is a big shift. As recently as the first week of September, just 2% had reported mills willing to negotiate.
The change in the tone of price talks is similar in other product categories: About 35% of galvanized buyers and 24% of cold rolled buyers now report some wiggle room in price negotiations. Talks are still very tight in Galvalume and plate, however, report survey respondents.
Mills clearly still have the dominant bargaining position, but it appears to be weakening a bit as competition from imports increases, lead times shorten and prices begin to moderate.
By Tim Triplett, Tim@SteelMarketUpdate.com

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.