Steel Mill Negotiations: Willingness to Talk Price Remains High

As one buyer commented, “Folks are still very, very hungry for real tons.” Another remarked, “The band is smaller than it was, but there is still room from where they start”

Broken down by product, 86% of hot rolled buyers surveyed are now responding that mills are willing to negotiate lower prices, up from 79% two weeks prior. Negotiation rates were in the 92–94% range for the three prior surveys.

For cold rolled, 82% of buyers polled reported that mills were willing to bargain, up from a 75% rate two weeks ago. 85% of galvanized buyers reported that mill prices are negotiable, relatively unchanged from two weeks prior, and down from the 92–93% rates seen in recent months.

Galvalume negotiation rates tend to be more volatile due to the smaller market size, with 100% of respondents reporting mills are negotiable this week, up from a 67% rate in early August.

Negotiations have been slightly less common in the plate market but have been rising since mid-July. 80% of buyers reported a willingness to negotiate this week, up from 64% two weeks prior and 57% one month ago. Plate negotiation rates had been between 54–67% for nearly two months prior. Recall we saw plate negotiation rates of 0–18% in March and April.

SMU’s Price Momentum Indicator was adjusted from Lower to Neutral on Aug. 9 and will remain there until the market establishes a clear direction.

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