Steel Mill Negotiations: Buyers Still Have the Upper Hand

With steel prices continuing to ease, buyers clearly hold the upper hand in price negotiations with mills. Market dynamics have turned 180 degrees in the past six months, from a seller’s market in March and April to a strong buyer’s market today. According to our latest steel market survey, a high percentage of buyers continue to report that mills are willing to talk price to secure an order. That high willingness to negotiate has been evident in each of our market checks since May.

Steel Market Update polls hundreds of steel buyers every week, asking this question: Do you find domestic mills willing to negotiate spot pricing on new orders? On average this week, 89% of steel buyers reported that mills were willing to negotiate lower prices on new orders. As shown in Figure 1, this negotiation rate is in line with what we reported in late September. It remains near the previous high levels seen in July and early August. Recall we saw negotiation rates as low as 16% in March.