Final Thoughts

There are varying opinions on what should happen with trade policy, but all this uncertainty is roiling the markets. Because, for all the hoopla around “Liberation Day,” it took just a week for the global economy to get a 90-day pause on those harsher “reciprocal” tariffs.

And we’ve all felt the whiplash of the on-again, off-again routine on tariffs. We got a preview of it – in real time at the Tampa Steel Conference – when Trump first gave Mexico and Canada a 30-day reprieve from 25% tariffs on exports to the US, back on Feb. 4.

And it’s been quite a ride since.

We’ve seen prices and market sentiment rocket up and then turn on a dime. Mills are still trying to hold the line, but the outlook has shifted. We saw a big jump in mills now actively talking price in our latest data.

For about a month, mills were resolute on pushing prices up. We saw that playing out as service centers and manufacturers alike reported higher prices. But “Liberation Day,” and the reprieves since, flipped the pricing stance almost instantly–something our surveys have captured clearly (see chart below.)

The pricing seesaw

It wasn’t long ago –March 19 to be exact – that nearly two-thirds of survey respondents expected prices to surge well above $1,000 per short ton. But now we’ve gone from asking data providers when prices would peak to when they would bottom. Most don’t think they will bottom out anytime soon, and the bottom will be well below where they are now. See the following two charts.  

It seems many believe a lot of demand was pulled forward. Here’s just some of what survey respondents had to say:

“Hard to know. It depends on the negotiation of tariffs and how true demand is affected.”

“Demand isn’t strong enough to support higher prices, but…tariff uncertainty may keep prices up as it’s unclear whether or not imports are a choice.”

“Nobody has clarity right now due to the administration’s changing messages.”

“No clue, actually.”

“I think the lack of sales will cause the mills to drop pricing, when in reality, it is because we stocked up and jobs slowed.”

“I’m pretty bearish on overall demand from now through the ‘Summer Doldrums,’ but I have NO idea what late summer/fall looks like. Just a total guessing game when we get into Q3/Q4.”

“Still some downside to come unless all tariffs are negotiated and settled.”

“We are expecting pretty gradual but steady decreases for the next few months. We have forecasted sub-$800/ton HRC in the summer.”

“I think due to unsettled tariffs there are still corrections coming if settled prices could begin climbing again.”

Lead time outlook

The market whipsaw has been evident in some markets, others not so much. But sentiment around some of those is that the other shoe is ultimately going to drop.

Take lead times as an example.

Mill lead times (the period between placing an order and receiving it) have been pretty stubborn when compared to pricing and buying patterns. In our latest analysis, sheet and plate lead times flattened out vs. mid-April levels. And, on average, are roughly down about half a week over the past month.

But expectations on future lead times (see chart below) are pretty bearish.

And what some had to say:

“Lead times will pull back in the next few months, then flatten out.”

“Demand is too weak to cause lead times to extend, and they can’t drop too much more.”

“We are already seeing lead times slip. And coming out of spring outages with demand so weak, they’ve got nowhere to go but lower from here.”

“Average demand and plenty of supply.”

“I believe they will contract over the next two months, and then be flat to up again.”

Buying has shifted… for the time being

A major shift we captured in our latest survey was how service centers and manufacturers responded regarding buying patterns. A clear shift we’ve only seen twice in nearly two years. OEMs and service centers alike are not currently building inventories, as noted just below.

The last time we saw such a pivot was February 2024, after prices started falling following a short-lived mill price blitz on their way to our recent low of $635/st in July 2024. And before that, September 2023.

The takeaway here is that it’s not any one thing but a confluence of them. Uncertainty on tariffs and how painful their impact might be, coupled with delayed projects and slower demand from early buying, could widen the summer doldrums gap.

Needless to say, most are maintaining their inventories, watching closely, and hoping for clarity before jumping into build stocks.

A few comments:

“Maintaining only due to heading into our busy season.”

“We anticipate a pullback in pricing as buyers stay on the sidelines…so we are waiting to gain more clarity.”

“Maintaining and April bookings are down.”

“Everyone is waiting to see what tariffs stick and which don’t, and how demand reacts along with price.”

“Buying less due to demand being lower, which is what we forecasted.”

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