SMU Data and Models

Steel Mill Negotiations: More Buyers Pushing Back

Written by Tim Triplett


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

Latest in SMU Data and Models

SMU market survey results now available

The latest SMU 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.” Historical survey results are also available under that selection. If you need help accessing the survey results, or if your company would like to have your voice heard in our future surveys, contact info@steelmarketupdate.com.