SMU Data and Models
SMU survey: More buyers report mills willing to talk price
Written by Brett Linton
September 26, 2024
More than three-quarters of the steel buyers participating in our market survey this week reported that mills are negotiable on prices for new order. Negotiation rates have been in this range for the last six weeks, following the gradual decline across July and into early August.
Every other week, SMU polls hundreds of steel market executives asking if domestic mills are willing to negotiate lower spot pricing on new orders. As shown in Figure 1, 76% of all buyers we surveyed this week reported that mills were willing to budge on price. This is four percentage points higher than our negotiation rate two weeks prior, and within 1% of those in August. Compare this to early July when we saw a multi-year high rate of 92%.
Negotiation rates by product
As seen in Figure 2, negotiation rates differ across our various sheet and plate products, ranging from 63-92%. Negotiation rates were highest for Galvalume, galvanized, and plate products. The biggest movers from our prior survey were cold rolled, followed by galvanized and hot rolled. Negotiation rates by product are:
- Hot rolled: 63%, down eight percentage points from Sept. 11. This is the lowest rate recorded since March.
- Cold rolled: 75%, up 14 percentage points and the highest since July
- Galvanized: 83%, up 11 percentage points
- Galvalume: 92%, up six percentage points and the highest since July
- Plate: 83%, down six percentage points and the lowest since July
Here’s what some survey respondents had to say:
“We aren’t working directly with any mills right now, but I have heard some of the folks out on the West Coast are pushing for [hot rolled] tons.”
“I think there is a small range, but larger [hot rolled] buys can get something off.”
“[Negotiable on hot rolled] depending on their order book.”
“[Negotiable on cold rolled] based on tonnage.”
“Mills have definitely worked to push [galvanized] prices up with the latest trade cases, expecting more.”
“[Negotiable on hot rolled] but not all mills.”
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
Service centers: Mill orders recover in June
SMU’s Mill Order Index (MOI) rebounded in June after declining for three straight months. The gain complemented a modest boost in service center shipments for the month, according to our latest service center inventories data.
Apparent steel supply remained high in May
The volume of finished steel entering the US market remained elevated in May, in line with April figures, according to SMU’s analysis of Department of Commerce and American Iron and Steel Institute (AISI) data
June service center shipments and inventories report
Flat rolled = 55.8 shipping days of supply Plate = 59.4 shipping days of supply Flat rolled US service centers’ flat-rolled steel supply edged down in June with a modest boost to shipments month on month (m/m). At the end of June, US service centers carried 55.8 shipping days of flat roll supply, down from […]
SMU Scrap Survey: Sentiment Indices rise
Both current and future scrap sentiment jumped this month, though survey participants reported responses before key trade news was announced.
SMU Survey: Sentiment splits, buyers have better view of future than the present
SMU’s Steel Buyers’ Sentiment Indices moved in opposite directions this week. After rebounding from a near five-year low in late June, Current Sentiment slipped again. At the same time, Future Sentiment climbed to a four-month high. Both indices continue to show optimism among buyers about their company’s chances for success, but suggest there is less confidence in that optimism than earlier in the year.