SMU Data and Models
SMU Market Trends: Optimism Has Staying Power
Written by Tim Triplett
March 4, 2022
Despite war in Ukraine, rising inflation, and uncertainty around steel prices, more than 80% of buyers responding to Steel Market Update’s survey this week still described themselves as optimistic about their prospects for the first half of this year.
Their generally positive outlook – reflected in the comments below – point to healthy steel demand and the widespread belief that the painful price correction is nearing an end.
“Demand is remaining strong and prices are stabilizing.”
“We all got stuck buying everything we could get our hands on, so everyone was over inventoried. Once this lump is swallowed, lead times and true demand will take over.”
“I believe the steel mills will follow through with their commitments to stabilize markets/prices by controlling capacity.”
“Despite inflation, demand is quite good. I just need better access to trucks.”
“Customers are honoring orders, unlike other times when the market has divebombed like this.”
“We are almost at a bottom and hopefully will uptrend in the second quarter.”
“Our production schedule is very full, with committed work into the third quarter.”
“Even with margins squeezed, we’re concluding our most profitable February in company history. While the 2H could get tough, we are riding high right now.”
Certainly not every buyer is quite so bullish. “We’re losing money on every order due to high-cost inventory,” said one service center executive. “There’s still lots of inventory and prices are all over the board. Demand is spotty for many markets and regions,” said another. “There seems to be another black swan lurking around every corner,” observed a third respondent.
By Tim Triplett, Tim@SteelMarketUpdate.com
Tim Triplett
Read more from Tim TriplettLatest in SMU Data and Models
SMU Survey: Steel Buyer Sentiment Indices soften
SMU’s Steel Buyers’ Sentiment Indices eased this week, both approaching multi-year lows.
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: Mill lead times remain short
Steel mill lead times on sheet products contracted across the board this week compared to early July, while plate production times moderately extended, according to steel buyers responding to this week’s market survey.
SMU Survey: Most buyers say mills are open to negotiating prices
More than nine out of every ten steel buyers polled by SMU this week reported that mills are negotiable on new order prices. Negotiation rates have increased in each of our last three surveys following the early-June lull, reaching a record high this week.
Service centers: Mill orders recover in June
SMU’s Mill Order Index (MOI) rebounded in June after declining for three straight months. The gain complemented a modest boost in service center shipments for the month, according to our latest service center inventories data.