SMU Data and Models

SMU survey: Buyers say mills less willing to negotiate lower sheet prices

Written by Brett Linton

Steel buyers report that mills are less willing to talk price on new sheet orders than they were in weeks past, according to our most recent survey data.

In contrast, mills’ willingness to negotiate on plate products remains relatively high. It is now at the second-highest rate of the year.

Every other week, SMU polls steel buyers asking if domestic mills are willing to negotiate lower spot pricing on new orders.

This week, 49% of participants surveyed by SMU reported mills were willing to negotiate prices on new spot orders. This is significantly lower than the 84% level reported in our previous market check (which was a five-month high). This is now the lowest negotiation rate we have seen since the first week of January (Figure 1).

Figure 2 below shows negotiation rates by product. The rate for hot rolled coil fell 26 percentage points to 54% this week, while cold rolled experienced a 46 percentage point reduction to 30%. Mill willingness to negotiate rates on galvanized products shrunk by a third to 53%, while Galvalume was halved to 50%. Negotiation rates on plate products saw a slight decline but remained high at 70%.

Here’s what some survey respondents had to say:

“Yes, but not at the lower levels of a few weeks ago (on hot rolled).”

“Not nearly to the level we had been seeing (on hot rolled).”

“Strong order books domestically, and no need to negotiate (on hot rolled).”

“Certain mills are beginning to hold the line again (on plate).”

“Yes, with tons attached (on plate).”

Note: SMU surveys active steel buyers every two weeks to gauge their steel suppliers’ willingness 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.

Brett Linton

Read more from Brett Linton

Latest in SMU Data and Models