SMU Data and Models
Service Center Spot Prices Peaking?
Written by John Packard
December 22, 2013
Manufacturing companies are beginning to report a fracture within the service center ranks. In our latest steel market analysis conducted last week, 12 percent of the manufacturers reported decreasing spot flat rolled prices from their service center suppliers. This is up from 4 percent measured at the beginning of December which was up from zero percent in early November.
The percentage of service centers reported to be raising prices shrunk from 65 percent at the beginning of the month to 42 percent now.
In the graphic below, we see the history of service center spot sales as reported by the manufacturing companies. We will have to carefully watch spot pricing results as we move into January to see if indeed the bloom is off the rose.
From the service center perspective, spot prices are continuing to rise as 63 percent of the distributors reported their company as raising prices. This is down 13 percentage points from early December results when 76 percent of the service centers were reporting prices as going higher. None of the service centers reported their company as lowering prices.
The continued push toward firmer spot prices represented by 63 percent of the service centers is a net positive for the domestic steel mills as they attempt to keep prices stable and moving higher over the next 30 days. For this reason, amongst others, Steel Market Update Price Momentum Indicator continues to point toward stable to higher pricing over the near term (30 to 60 days).
John Packard
Read more from John PackardLatest in SMU Data and Models
SMU price ranges: Plate flat as sheet inches higher
SMU’s steel price indices were steady to higher this week. Each of our sheet indices crept upwards from last week, while our plate index was unchanged.
SMU Steel Demand Index suggests further demand contraction
Steel Market Update’s Steel Demand Index ticked back seven points last week, falling further into contraction territory.
August service center shipments and inventories report
Flat rolled = 66.3 shipping days of supply Plate = 57.0 shipping days of supply Flat rolled Flat-rolled steel supply at US service centers grew further in August. The dynamic resulted from some Q3 restocking efforts at a perceived market bottom, met with shorter lead times and weaker demand. At the end of August, service […]
SMU market survey results now available
SMU’s latest steel buyers market survey results are now available on our website to all premium members.
SMU survey: Steel Buyers’ Sentiment Indices decline again
Following significant recoveries in late August, SMU’s Steel Buyers’ Sentiment Indices tumbled this week.