Service Centers
Service Center Spot Prices Starting to Break Out of Slump
Written by John Packard
May 12, 2015
For the first time in many months we have seen a break in spot market steel pricing coming out of the service centers. Manufacturing companies have been reporting to Steel Market Update via our flat rolled steel market questionnaire for a number of months that service center spot prices were falling. In the survey just completed this past week, we saw a break in that 10 percent of the manufacturing companies picked up on higher flat rolled steel prices being offered.
This is the first time during this calendar year where any manufacturing company has reported distributor spot prices as rising.
Service centers, who tend to be an optimistic bunch, also reported similar results to what we saw out of the manufacturing companies. For the first time since mid 4th Quarter 2014, service center respondents reported their company as raising spot prices. We also saw a major reduction in those reporting prices as decreasing (from 50 percent in mid April to 24 percent last week).
As SMU has stated in the past, service center support for a domestic mill price increase is imperative for the numbers to stick in the market. Many times we see distributors get to a point of capitulation – which we calculate to be when three quarters of all the service center respondents are reporting their company as dumping steel (selling at ever lower prices). The service centers reached that point in February and early March. Unfortunately, it took a number of months of bleeding off excess inventories before there was enough action on the mill books to justify increasing prices.
Here is what the longer term graphic looks like for the service centers. The manufacturing graphic looks very similar.
John Packard
Read more from John PackardLatest in Service Centers
Reliance taps Stotlar to be new board chair
Reliance Inc., the largest service center chain in North America, has picked Douglas Stotlar to be the next chairman of its board. The move will be effective Jan. 1, 2025. Mark Kaminski, the current chair, will then step down from that role but will remain on the board.
Flack Global Metals closes on Pacesetter deal
Flack Global Metals (FGM) has closed on its majority ownership stake in Pacesetter Steel Service.
Worthington Steel profits fall amid lower prices, volumes
Worthington Steel’s earnings tumbled in its fiscal first quarter of 2025. The company cited a drop in selling prices and tons sold for the sales dip for the three months ended Aug. 31.
Buyers say galv prices stable mill level but stuck in swamp on the street
Galvanized steel buyers on Tuesday discussed the eerie stability in sheet prices of late. Expectations are for the murky market to persist in the short term, while glimmers of hope continue for prices pushing higher.
Triple-S Steel buys West Coast distributor Borrmann Metals
Triple-S Steel Holdings has acquired West Coast steel products distributor Borrmann Metals Co.