SMU Data and Models

Steel Mill Negotiations: Firm Grip Remains, Potential Signs of Loosening

Written by Brett Linton

The firm grip mills have held on price negotiations remains but may be softening, according to buyers polled in our latest market survey. 

Every two weeks, SMU asks respondents: Are you finding domestic mills willing to negotiate spot pricing on new orders placed this week? On average this week, three out of four steel buyers reported that mills are not willing to negotiate lower on new orders. While high, that rate is down compared to our late March survey, when 84% of buyers reported mills were non-negotiable. Multiple buyers commented that in the near future, they expect mills will begin to budge more on price to secure new orders. 

When it comes to hot-rolled coil, 69% of buyers said mills were standing firm on prices, down from 80% two weeks prior. But while more mills are willing to negotiate, this is not the buyer’s market we saw late last year and earleir this year, when more than 90% of respondents reported mills were willing to negotiate lower prices. In the cold rolled and coated segments, most buyers continue to report that mills will not budge on prices to secure orders, with only 10-25% saying mills are willing to talk price. 

Negotiations were never quite as loose in the plate market and have been tightening since early March. Our latest survey shows that 82% of plate buyers responding to our survey reported mills are not willing to bargain, versus a 100% non-negotiable figure two weeks ago.

SMU’s Price Momentum Indicator was adjusted from Higher to Neutral on Tuesday of this week, indicating prices may be in transition over the next 30-60 days. We will keep our Momentum Indicator at Neutral until the market establishes a clear upward or downward trajectory. 

Note: SMU surveys active steel buyers twice each month to gauge the willingness of their steel suppliers to negotiate pricing. The results reflect current steel demand and changing spot pricing trends. SMU provides our members with a number of ways to interact with current and historical data. To see an interactive history of our Steel Mill Negotiations data, visit our website here.

By Brett Linton,

Brett Linton

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