SMU Data and Models

Steel Mill Negotiations: ​​Buyers Hold the Bargaining Power

Written by Brett Linton

July 7, 2022

Nearly nine out of ten steel executives polled this week reported that mills are willing to talk price to secure an order, according to our latest steel market survey. A high willingness to negotiate has been evident in our market checks since early May and now stands at the highest level since early February 2022.

Every other week, SMU asks survey respondents: Are you finding domestic mills are willing to negotiate spot pricing on new orders? On average this week, 88% of steel buyers report that mills were willing to negotiate lower prices on new orders, up from a rate of 84% when we polled the market two weeks prior and up from 74% one month ago. Recall we saw negotiation rates as low as 16% in March.

Broken down by product, 92% of hot rolled buyers surveyed this week responded that mills were willing to negotiate lower prices, in line with the levels recorded since mid-May. Cold rolled and galvanized respondents sing the same tune, with 89-93% of buyers now reporting that mills are now negotiable. Willingness to negotiate on Galvalume products increased this week as well, with 80% reporting that mills are willing to negotiate, up from 50% two weeks prior and up from 43% one month ago. Note that Galvalume figures can be more volatile due to the limited size of that market and our smaller sample size.

Negotiations had been less common in the plate market, but our latest two surveys have shown that 64-67% of plate buyers report mills are willing to bargain. This is up from 47% one month prior. Recall we saw plate negotiation rates of 0-18% in March and April.

SMU’s Price Momentum Indicator remains at Lower since our adjustment on May 10, indicating we expect prices to decline over the next 30–60 days.

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@SteelMarketUpdate.com

Brett Linton

Brett Linton is a senior analyst for Steel Market Update, where he began his career. Linton has been in the steel industry since 2010. He has held roles as a category manager and strategic insights director at Reibus before returning to SMU in 2024. He is a graduate of The University of North Georgia with a degree in Finance and Accounting. Brett can be reached at brett@steelmarketupdate.com or 724-314-0179.

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