SMU Data and Models
Service Center Spot Price Trend Shifting Away from Higher Prices
Written by John Packard
September 22, 2013
We heard it earlier this month when during our HARDI steel conference call the wholesalers complained of reduced margins due to competitive pressures and mentioned that there were a growing number of non-traditional galvanized suppliers competing for the mechanical contractors business.
During last week’s steel market review conducted by Steel Market Update (SMU), manufacturing companies reported seeing as many service centers lowering prices as those attempting to increase spot prices (see graphic). At the beginning of August a majority of manufacturing companies reported their service center buyers raising spot prices. Since then, the percentage shrank to 32 percent at the beginning of September and is now at 15 percent. The majority of manufacturing companies are reporting spot prices as being stable. By the way, the thumbnail graphics are “clickable” which will blow up the size for you to be able to read them better
The percentage of service centers reporting their spot prices as dropping increased from 5 percent at the beginning of September to 12 percent this past week. The percentage of distributors raising prices shrank from 35 percent to 27 percent while those reporting spot prices as remaining the same remained steady at 61 percent last week compared to 60 percent at the beginning of the month.
Steel Market Update believes the strength of the service center spot pricing is directly related to the ability of the domestic steel mills to collect price increases. The trend, at this moment, is moving away from distributors raising spot prices, most likely due to the belief that excess inventory will soon enter the market in the form of USS Lake Erie Works, ThyssenKrupp and AK Steel catching up on their late orders.
What may work to hold spot prices steady is the maintenance going on at ArcelorMittal, the hot strip mill outage scheduled for December at Nucor Berkeley and planned maintenance at Severstal Dearborn and Columbus.
John Packard
Read more from John PackardLatest in SMU Data and Models
SMU Survey: Current Buyers’ Sentiment Index jumps, Future Sentiment slips
SMU’s Current Buyers’ Sentiment Index rocketed up this week, while the Future Buyers’ Sentiment Index edged down. The two indices are almost at parity.
SMU Survey: Mill lead times stretch to 10-month highs
Buyers responding to our latest market survey reported that steel mill lead times were stretching out this week for sheet and plate products tracked by SMU. The results weren’t much of a surprise. Production times have begun moving out following a wave of frenzied buying in response to stricter Section 232 announced by the Trump […]
SMU Survey: Mills slam door on buyers looking to talk price
Mills’ flexibility on price for spot orders has taken a nosedive to levels not seen since the end of March 2023.
SMU Survey: Steel Buyers’ Sentiment indicates increased optimism
After reaching multi-month lows in mid-January, SMU’s Steel Buyers’ Sentiment Indices rebounded this week to some of the highest readings recorded in months.
SMU Survey: Mill lead times fluctuate, extensions expected
While we have seen some movements in recent weeks, steel mill production times remain within a few days of the historical lows observed over the last two years, a trend observed since mid-2024.