SMU Data and Models
SMU Survey: How Much of 2nd Price Increase Will Stick?
Written by John Packard
January 21, 2016
The vast majority of the respondents to our latest flat rolled steel market analysis believe that the domestic steel mills will be able to collect “some” of the latest round of price increases which range from $20 to $30 per ton.
In our latest assessment of the flat rolled market, we asked whether the domestic mills will be able to collect all, some or none of the January price increase. Seventy-six percent of respondents said that the mills would be able to collect some of the increase, 11 percent thought all of the increase would be collected, and 13 percent thought none of it would be collected.
What Our Respondents had to Say
“ArcelorMittal explained their price increase as follows: “These increases are necessary in order to restore some level of profitability to our business. We have experienced an increase in order entry of products due to a reduction in inventories and the continued strength of the consumer driven industries, automotive and appliances”. That strikes me as a lame reason. And combine that with: the big gap between domestic and foreign, rising imports, and still low capacity leaves me questioning whether the fundamentals are there for this 2nd increase.” Wholesaler
“All or most on crc/galv not so confident about hrc.” Service center
“They will announce a 3rd increase late Jan or Early Feb and that will give them the ability to collect the 2nd increase.” Trading company
“Too much too fast will push customers back to imports &/or drive competition for available tons between domestic producers… either way deflating likelihood of sustained price increases.” Manufacturing company
“Doesn’t appear to be much will be collected but prices are slowly solidifying.” Service center
“The mills need to be very careful here. They are pricing in the effect of preliminary AD/CVD which totaled between $60 and $80/ton. All the domestics are doing here is allowing the foreign V domestic spread to remain constant and are giving away all of their advantage. In short, if they aren’t careful, they will encourage domestic customers to continue buying foreign steel.” Manufacturing company
“I continue to hear from other Purchasing personnel that their business is picking up and they ran their inventories down too much. I have been selling coils to some to supply their needs which is very uncommon.” Manufacturing company
“If mills issues continue to sprout up, then they will get closer to all.” Service center
“$20 out of the $70 announced in the last month.” Manufacturing company
“I don’t believe they collected the first increase yet.” Manufacturing company
John Packard
Read more from John PackardLatest in SMU Data and Models
SMU market survey results now available
SMU’s latest steel buyers market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the pricing and analysis tab and look under the “survey results” section for “latest survey results.” Past survey results are also available under that selection. If you need help accessing the survey results, or if […]
SMU Survey: Steel Buyers’ Sentiment Indices rebound
Following months of fluctuations, SMU’s Steel Buyers’ Sentiment Indices rebounded this week, now at multi-month highs. Both of our Indices remain in positive territory and indicate that steel buyers are optimistic about the success of their businesses.
SMU Survey: Mill lead times remain stable and short
Steel buyers participating in our market survey this week reported stable mill lead times for both sheet and plate steel products.
SMU Survey: Most buyers report mills still willing to talk price
Most steel buyers SMU polled this week reported that mills remain willing to negotiate new order pricing.
October service center shipments and inventories report
Flat rolled = 63.4 shipping days of supply Plate = 52.4 shipping days of supply Flat rolled shipments and inventories Flat-rolled steel supply at US service centers remains seasonally high. October inventories increased after edging lower in September – a dynamic driven largely by disappointing demand. October’s report reflects lower demand and stable lead times […]