SMU Data and Models
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Steel Mill Negotiations: All the Chips are on the Mill Side
Written by John Packard
April 7, 2016
Buyers and sellers of flat rolled steel reported to Steel Market Update this past week that the domestic steel mills are less willing to negotiate steel prices. We believe this is due to strengthening order books, extending lead times, positive Sentiment and improving demand.
In fact, we were learning throughout the day today that many mills are either not in the spot market at all, or their order books are currently closed pending settlement of scrap pricing and having a couple of the larger mills (such as SDI) open their books.
We have had two price increase announcements so far this week: NLMK USA at +$40 per ton ($2.00/cwt) and SSAB at +$60 per ton ($3.00/cwt).
You can clearly see the trend for negotiations between the domestic steel mills and their customers based on the results of this weeks flat rolled steel market trends analysis.
A side note: The data for both lead times and negotiations comes from only service center and manufacturer respondents. We do not include commentary from the steel mills, trading companies or toll processors in this particular group of questions.
To see an interactive history of our Steel Mill Negotiations data, visit our website here.
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John Packard
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SMU’s August at a glance
SMU’s Monthly Review provides a summary of important steel market metrics for the previous month. Our August report includes data updated through August 30th.
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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.”
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SMU survey: Lead times edge higher for sheet
Current steel mill lead time averages are a few days longer than levels seen one month prior, but remain near historical lows for both sheet and plate products.
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SMU survey: Steel Buyers’ Sentiment Indices surge
Both our Current and Future Indices are now up to multi-month highs, indicating continued optimism among steel buyers.
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SMU survey: Mills’ flexibility on prices up slightly
Steel buyers found mills slightly more willing to negotiate spot prices this week, according to our most recent survey data. Though this negotiation rate has ticked up vs. our previous market check, overall rates have been trending downward since July’s highs.