SMU market survey results now available

Key points and takeaways

We go over the big highlights of the survey in Final thoughts. Here are some other key points that we think are worth your time. (And, again, our premium subscribers can follow along with the latest results here.)

• Steel Buyers’ Current Sentiment edged back up but is now only four points above a four-year low (slide 9). Future Sentiment (slide 11) moved lower by nine points vs. the prior market check.
• Lead times for HR coil are still largely stable though moving marginally higher. Lead times for tandems products have improved modestly, as have those for plate (slide 13).
• On pricing, buyers said that most mills remain willing to negotiate. But there was still a steady decline in the number willing to cut deals after both Nucor and Cliffs held HR prices around $700/st (slide 16). We’ll keep tabs on whether negotiation rates continue to slide in the weeks ahead.
• On the raw materials front, about two-thirds of respondents expect scrap prices to be sideways again in September (slide 19). Another 31% expect prices to move up next month, while just 6% anticipate a decline.
• What might keep sheet prices from a sharp rally? Some 65% of respondents said they expect to meet forecast in August, while another 30% said they will miss their business forecast this month (slide 20). Only ~5% think they will exceed forecasts in August. Also, more than two-thirds of service centers said they are releasing less steel (slide 28) than a year ago.
• What might support higher prices? Only 20% of service centers reported lowering prices – likely a continued reaction to mills trying to hold the line. (See slide 38, one of our favorites.) That’s a significant shift from the nearly 85% who were cutting prices just two about a month ago. But it might be too soon to predict any surge in prices. Just about 16% of service centers reported increasing prices.

There’s a lot more to unpack in the survey. Be sure to check out this week’s Final thoughts for some of the comments and key reactions directly from our sources.