Service Centers

SMU Survey Catches Early Changes in Service Center Spot Pricing
Written by John Packard
March 23, 2014
One of the keys watched by Steel Market Update is service center spot pricing into their customers – especially the manufacturing segment of the industry. We have found if service centers are lowering their spot prices on hot rolled, cold rolled and coated steels, especially after a price increase announcement, it is more difficult for the domestic mills to get flat rolled steel price increases to stick.
With the flat rolled steel price announcement coming on Monday afternoon (March 17th) we believe our survey results will provide a good barometer of what the service centers were doing at the time of the announcements.
Half of the manufacturing companies responding to our questionnaire reported distributors as moving spot prices lower, 46 percent replied that spot prices remained the same while 4 percent reported prices as moving higher. The percentage of manufacturing companies reporting prices as decreasing dropped from 54 percent in early March to 50 percent now.
In the graphic below we are providing a peak at how the market has changed from early November to this past week.
The vast majority of service centers (72 percent) reported prices as remaining the same as two weeks before. Those reporting spot prices as dropping moved lower, from 33 percent to 20 percent. Eight percent of the distributors advised that their company was increasing spot pricing.
Here is a longer time view of the service center responses.
Our early opinion is that the service centers appear to be responding to the announcements. We will watch the next survey result which will begin on Monday of next week. At that point in time we should have a better read of whether the change was short term or the beginning of support for the mill price increases.

John Packard
Read more from John PackardLatest in Service Centers

Olympic opens new Houston facility for Action Stainless unit
Olympic Steel has opened a new facility in Houston to support its Action Stainless business.

Worthington Steel sees demand improvement after earnings slump
Lower volumes and steel prices dampened Worthington Steel’s profits, but market momentum is building, the metals processor said in its most recent quarterly earnings report.

Galvanized buyers see strong demand, but uncertainty lingers
Demand is up, but tariffs raise concerns

Olympic taps Zito for new VP of development role
Cleveland-based Olympic Steel Inc. has promoted Scott M. Zito to the newly created role of vice president of business development. Zito has been with the company for more than 40 years.

Worthington Steel and Samuel to close Cleveland coil processing JV
Worthington Steel confirmed it is closing the Worthington Samuel Coil Processing (WSCP) facility in Cleveland. WSCP is a joint venture between Worthington Steel and Oakville, Ontario-based Samuel, Son & Co.