Steel Blog

Steel Market Update is working on a new index to measure flat rolled steel inventories in service center warehouses at the end of each month. Our goal is to assist the flat rolled steel industry to better understand inventories and their potential impact on steel mill order books and lead times. SMU will also analyze data provided from distributors to track steel inventory trends.

We are working to accomplish this in a variety of ways:

Few Favor NAFTA Withdrawal

Tuesday, September 12, 2017 2:53 PM Written by

Seven out of 10 respondents to the latest Steel Market Update market trends questionnaire feel the United States should not withdraw from the North American Free Trade Agreement. Less than 30 percent say the U.S. should follow through on its threats to pull out of the trade pact if it does not win concessions from Canada and Mexico.

Ethics and Your Business: Bluffing vs. Lying

Monday, July 31, 2017 1:34 PM Written by

“Business negotiation is similar to poker. Just because I may be bluffing doesn’t mean I am morally defective. Bluffing is a universally recognized part of the game,” responded one reader to Steel Market Update’s new “Ethics and Your Business” column.

Domestic steel mills announced flat rolled steel (hot rolled, cold rolled, galvanized, Galvalume) price increases early last week. However, as is sometimes their want, especially when lead times are shorter than they would like, most of the mills gave their customers time to place orders at the existing prices quoted prior to the announcements.

It is normal procedure for Steel Market Update (SMU) to take our Price Momentum Indicator to Neutral whenever price changes are announced. We do this to ensure that we do not influence the process, and to give the mills and their customers time to negotiate. We did not do this last week due to the grace period most mills were providing to their customers.

Steel Market Update is reported a new record high was achieved this week in our Current Steel Buyers Sentiment Index 3-month moving average (3MMA). Buyers and sellers of flat rolled steel continue to be very optimistic about their company’s ability to be successful in the existing market environment. As a single data point, Sentiment was measured as being +75 which is 2 points lower than the reading we made last month. One year ago, Sentiment was -5 points lower than the +70 reported at that time.

When looking at the data from a three-month moving average perspective, Current Sentiment set a new high reaching +74.17. This is well above the reading reported last year at this time when our 3MMA for Current Sentiment was +61.50.

Steel Market Update concluded our analysis of the flat rolled steel markets on Thursday, March 23, 2017. One of the proprietary products produced out of our twice monthly flat rolled steel market trends analysis is the SMU Steel Buyers Sentiment Index which consists of Current and Future Sentiment Indices.

Our Current Sentiment Index as a single data point came in at +73. This is down 4 points from the +77 reported at the beginning of the month. Our Current Sentiment Index has consistently been over +70 for the past three months. Buyers and sellers of flat rolled steel continue to be very optimistic about their companies’ ability to be successful in the existing or current market environment (an explanation of our index is at the end of this article).

Our preference is to smooth out the data we receive so that we can present a better view of the over-all trend for the market. We do this by using a three-month moving average (3MMA). Our 3MMA for Current Sentiment is +73.50 which is the highest it has ever been improving on the +73.0 reported at the beginning of the month of March 2017.

Steel Market Update (SMU) has been struggling to get a clear view of the current market situation as we attempt to identify which direction we see flat rolled steel prices going from here. We have been receiving mixed messages over the past two weeks and we have been advising our readers to remain vigilant and stay close to your suppliers as well as those who are providing you independent market intelligence.

So, this is how we are seeing the flat rolled steel markets right now. Benchmark hot rolled has been weakening over the past one to two weeks. Not every mill is reacting to the market and not every plant within a mill group is reacting the same. We have seen multiple price points indicating hot rolled coil base prices in the $600-$610 with some reporting spot prices (with tons) under $600 per ton.

We are changing our range on hot rolled pricing to $600-$640 per ton with an average of $620 per ton. This is $5 per ton lower than what we reported on Tuesday evening and $10 per ton lower than what we reported last week.

The steel industry does not seem to be concerned about the transition of power as Donald Trump becomes the 45th President of the United States. There have been a number of cabinet appointees who have testified about the domestic steel industry and the need to “level the playing field” by taking governments, such as China, out of the subsidization of their industry. Whether these discussions are impacting buyers and sellers of the steel industry in the United States, we can only speculate.

Steel prices have been increasing both here in the United States as well as elsewhere around the world. At this time, it appears the higher steel prices are making those involved in the industry more optimistic and we are capturing that optimism in our analysis of the flat rolled steel markets.

One of the key proprietary indicators generated out of our twice monthly market analysis is our Steel Buyers Sentiment Indices. Buyers and sellers of flat rolled steel continue to be optimistic about their company’s ability to be successful both in the existing market environment (Current Sentiment) as well as looking out three to six months (Future Sentiment).

SMU Current Sentiment was measured at +73 this week. This exceeds the previous high of +71 set two weeks ago as well as the first week of July 2016 and again during the mid-April 2016.

On a single data basis both our Current Steel Buyers Sentiment Index and Future Sentiment Index are at the record highs for our index. Current Sentiment, which is how buyers and sellers of flat rolled steel feel about their company’s ability to be successful in the existing market environment, came in at +71 this week. This is +1 point from what we saw in the middle of December 2015 and tied with the all-time highs set during mid-April 2015 and again at the beginning of July 2015. One year ago, Current Buyers Sentiment was +44. An explanation of our point system follows at the end of this article.

Looking at Current Sentiment from a three-month-moving average (3MMA), which is our preferred method of tracking the trend, Sentiment rose +4.67 to +61.67. The trend for a more optimistic buying and selling community is now two months old after peaking in early July and then tapering off from there.

Are You New to Steel Sales or Steel Purchasing?

Monday, November 07, 2016 2:44 PM Written by

Steel Market Update got an email from Jacob Rogers who had recently joined Sioux City Foundry in a sales position after having previously worked in a different field. Mr. Rogers told us, "I wanted to send you a quick email to thank you as your “Beginning the steel sales process” Blog really made a difference for me and my vision. I have been in sales management and training for 16 years and recently decided to make a dramatic change in industries from the Wireless cellular world to the steel Fabrication and supply industry and so far I’ve loved the challenge of learning and understanding the ins and outs but I’ve always known the key essentials to a successful sales flow. I've coached and developed many back behind the sales flow model of the process being as important as the sale itself. But I have never sold anything or managed in the steel industry; reading your blog has taught be that there is no dramatic change up in the sales process its just a matter of learning and developing the proper process around the product and the customer base. Anyways didn’t want to right a long story but I appreciate your blogs and plan to read more."

For those who don't realize it, we have an abundant amount of free material in our website for sales people, purchasing people and those just interested in the steel industry. Many of the articles can be found under the "Resources" tab on our website. Take the time to look around. If you would like help in navigating our website contact This email address is being protected from spambots. You need JavaScript enabled to view it..

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