SMU Data and Models
SMU Flat Rolled Steel Market Trends Survey: Price Increase Announcements & Lead Times
Written by John Packard
November 27, 2016
Twice per month Steel Market Update (SMU) conducts a survey of the flat rolled steel markets. We invite close to 600 people representing approximately 550 companies spread out around the United States and Canada. We concentrate on two main steel buying groups: manufacturing companies and service centers/wholesalers. Our most recent market trends analysis was completed on Wednesday, November 23rd during which 44 percent of our respondents were distributors/wholesalers, 42 percent were manufacturing companies with the balance being made up of steel mills (6 percent), trading companies (6 percent) and finally toll processors (2 percent).
With flat rolled steel price increase announcements becoming the norm over the past four weeks we wanted to know if steel buyers/sellers and executives in the industry had any opinions regarding the chances of more flat rolled price increases being made prior to the end of the year. We also wanted to know if the announcements already made (and there have been three to date) were having any impact on lead times, thus creating an environment where steel buyers need to make decisions to buy sooner than just a few weeks ago.
As you can see in the graphic below, 79 percent of our respondents believe more price announcements are coming and 69 percent of our respondents are reporting lead times as extending on flat rolled products since the announcements were made.
What Our Respondents are Saying on the Subject of More Price Increases before Year’s End:
“If the mills try another one, they will push it too far. We all know what happens when they have done that in the past, collapse.” Service center
“I think it will be too much too fast and they will beg for orders in January and February.” Service center
“[There will be more price increases] only if the lead times remain extended.” Manufacturing company
“I am betting on one more.” Service center
“I know plate is going up again.” Service center
“[There will be more price increases} if only to get the first 3 to stick.” Service center
“Absolutely” Service center
What Our Respondents are Saying on the Subject of Lead Times Extending Since Price Announcements:
“Some recovery in lead times. They were inflated in first half 2016, backed off in 3rd Q 2016 and are now beginning to recover.” Steel mill
“No active quotes but understand they are into Jan for galv.” Manufacturing company
“I am quoted [told] they are extending for HR, however steel is continuing to run early; with mills wanting to release early.” 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 […]