SMU Data and Models

Steel Mill Negotiations: Momentum Shifting from Sellers to Buyers

Written by Tim Triplett

Buyers continue to gain leverage in steel price negotiations, especially for hot rolled products.

Steel Market Update asks buyers every two weeks whether mills are willing to talk price on spot orders. Nearly three out of four (72%) of the hot rolled buyers responding to this week’s poll said mills are now willing to negotiate HR prices to land an order. The percentage has not been that high since August 2020 and is a clear indication that the mills are no longer in a position to dictate hot rolled prices.

The mills still have the stronger bargaining position in other products, as anywhere from 55% to 75% of buyers report mills still unwilling to negotiate prices on plate, cold rolled and coated products. But the green bars are rising in the chart below, pointing to the shifting momentum between buyers and sellers as lead times shorten and prices moderate.

What Respondents Had to Say

“Lead times have moved down a bit, but there’s no real negotiating.”

“Not much negotiation yet … but ‘yet’ is the key word. I could see the back-and-forth starting back up in Q1.”

“There’s some negotiating for 2021, quite a bit for 2022 for larger inquiries.”

“They are negotiating in a small range, though they are not willing to tank the market.”

“Cold rolled and coated are remaining stronger than HRC, at least for now. So the mills are remaining pretty firm there.”

“Tandem products domestically remain strong. We have not seen movement.”

By Tim Triplett, 

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