SMU Data and Models

Buyers Continue to Hold Upper Hand in Price Negotiations

Written by Brett Linton

November 22, 2022

A very high percentage of sheet buyers continue to report that mills are willing to talk price to secure an order, as they have since May, with more than nine out of ten reporting that this week. Negotiations on plate products are not as common, with slightly more than half of buyers reporting they are able to negotiate lower prices on new orders.

Every other week, SMU asks survey respondents: Are you finding domestic mills are willing to negotiate spot pricing on new orders? On average, 86% of steel buyers polled this week reported that mills were willing to negotiate on new order pricing. Two weeks ago we saw a rate of 91%, the highest rate recorded since January. As shown in Figure 1, negotiation rates have remained relatively high for over six months.

Figure 2 below shows negotiation rates by various products. This week, 95% of hot rolled buyers responded that mills are willing to negotiate on price, in line with levels two weeks ago. This is one of the highest rates seen since February. Hot rolled negotiation rates have averaged 90% over the last three months.

88% of cold rolled respondents reported that mills were willing to talk price. This is down from 94% two weeks ago and down from 90% one month prior.

For galvanized buyers, 94% responded that mill prices are negotiable this week. This is down just 1% from two week ago. Recall that in late October our galvanized negotiation rate reached 96%, the highest rate recorded in over eight months. Galvanized negotiation rates have been 90% or higher since mid-September.

Galvalume negotiation rates tend to be more volatile due to the smaller market size. 67% of buyers reported that mills are negotiable on new orders this week. This is down from a rate of 100% two weeks prior, but up from 60% one month ago.

Negotiations have been slightly less common in the plate market. 60% of buyers this week reported a willingness to negotiate, up from 57% two weeks earlier, and up from 47% one month ago. Plate negotiation rates were as high as 80% in September. Recall we saw plate negotiation rates between 0–18% in March and April.

SMU’s Price Momentum Indicator was adjusted from Neutral to Lower on Oct. 11 for all products, and continues to remain at Lower, in consideration of increased supply, weaker demand, and lower raw material costs.

Note: SMU surveys active steel buyers every other week 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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