SMU Data and Models
SMU survey: Buyers find mills less willing to negotiate pricing
Written by Brett Linton
August 1, 2024
Steel buyers of sheet products say mills are still flexible on spot pricing this week, though less so than two weeks prior, according to our most recent survey data. Alternatively, buyers of plate products responded that mills are more willing to talk price, with plate negotiation rates rising to an eight-month high.
SMU polls hundreds of service center and manufacturer buyers every other week asking if domestic mills are open to negotiation on new spot order prices. This week, four out of every five buyers we surveyed reported that mills are open to negotiating lower prices (Figure 1). This 80% rate has slightly eased over the last four weeks, having reached a multi-year high of 92% in early-July.
Figure 2 below shows negotiation rates by product. The rate for hot-rolled coil declined to 77% this week, now at levels not seen since April. Cold rolled buyers reported a negotiation rate of 79%, little changed from two weeks prior but overall down in comparison to recent months. Mill willingness to negotiate on galvanized products slipped to 77%, having topped out at a nine-month high of 100% in mid-July. The only sheet product with an increasing negotiation rate was Galvalume, increasing from 75% two weeks ago to 89% in late-July. Willingness to negotiate on plate products jumped from 79% in mid-July to 90% this week. This is the highest rate recorded since last November.
Here’s what some survey respondents had to say:
“Mills are trying to push pricing up prior to 2025 negotiations.”
“[Mill] has closed their books to re-evaluate, waiting on new September numbers. People are waiting to see what others do first, I believe.”
“Depending on location, yes (, willing to negotiate).”
“Yes, (willing to negotiate) but buyers power is losing near-term steam.”
Note: SMU surveys active steel buyers every other week to gauge their steel suppliers’ willingness to negotiate new order prices. The results reflect current steel demand and changing spot pricing trends. Visit our website to see an interactive history of our steel mill negotiations data.
Brett Linton
Read more from Brett LintonLatest in SMU Data and Models
SMU Survey: Buyers’ Sentiment tumbles as caution increases
SMU’s Buyers’ Sentiment Indices resumed their downward trend this week, erasing the modest recovery seen two weeks ago.
Service centers: Mill orders down further in April
SMU’s Mill Order Index (MOI) declined for a second straight month in April after repeated gains at the start of the year, according to our latest service center inventories data.
SMU Survey: Mill lead times edge lower
Sheet and plate lead times declined across the board this week, according to buyers responding to the latest SMU market survey. While our lead time ranges were unchanged compared to mid-April levels, average production times for each steel product we measure have declined from they were two weeks ago.
SMU Survey: Most buyers say price negotiations back on the table
Domestic mills are largely negotiable on spot prices, according to the majority of steel buyers responding to our latest market survey.
SMU Scrap Survey: Current, Future Sentiment Indices log declines
However, in a month plagued by tariff and economic uncertainty, both current and near-term outlooks for our scrap survey respondents remained surprisingly optimistic.