SMU Data and Models
Steel Mill Negotiations: More Willingness to Talk Price
Written by Tim Triplett
September 21, 2017
Mills are even more open to price discussions than they were a couple weeks ago, report steel buyers and sellers who replied to Steel Market Update’s latest flat rolled market trends questionnaire.
More than 100 executives responded to this week’s questionnaire. Steel buyers’ perceptions of their suppliers’ attitudes offer a snapshot of how steel mills are currently handling price negotiations.
Nearly half the respondents agreed that order books are weaker than expected and mills are open to price discussions. That percentage represents a significant jump from the 41 percent two weeks ago and 33 percent a month ago who found mills willing to negotiate.
Another 46 percent of buyers said some mills are flexible and others are firm, about the usual mix. But two weeks ago, 9 percent of respondents said they found mills unwilling to talk price; that figure declines to just 4 percent in the latest report.
By product category, 84 percent of manufacturing and service center respondents saw mills willing to negotiate hot roll orders, up significantly from 70 percent in the last report. In cold roll, the percentage jumped to 77 percent who found the price negotiable, up markedly from 66 percent two weeks ago. Galvanized saw a slight increase to 66 percent from 63 percent, while Galvalume declined to 70 percent from 82 percent, indicating less willingness to talk price on coated products.
Comments from buyers show no clear consensus: “The mills are reluctant to deal,” said one service center executive. “It depends on the mill,” said a manufacturer. “Lead time is relatively short at around 3 to 4 weeks. The upcoming planned outages should lend support to the mills.” Said a trader: “It seems like the spot market is soft and mill lead times are extremely short for some products, like HRC at West Coast mills.” Added another manufacturer: “I think order books are weak and the mills are controlling the pricing based on the foreign steel situation [import restrictions], as well as the hurricane and floods.”
Note: SMU surveys active steel buyers twice each month to gauge the willingness of their steel suppliers to negotiate pricing. The results reflect current steel demand and changing spot pricing trends. SMU provides our members with a number of ways to interact with current and historical data. To see an interactive history of our Steel Mill Negotiations data, visit our website here.
Tim Triplett
Read more from Tim TriplettLatest in SMU Data and Models
SMU Survey: Current Buyers’ Sentiment Index jumps, Future Sentiment slips
SMU’s Current Buyers’ Sentiment Index rocketed up this week, while the Future Buyers’ Sentiment Index edged down. The two indices are almost at parity.
SMU Survey: Mill lead times stretch to 10-month highs
Buyers responding to our latest market survey reported that steel mill lead times were stretching out this week for sheet and plate products tracked by SMU. The results weren’t much of a surprise. Production times have begun moving out following a wave of frenzied buying in response to stricter Section 232 announced by the Trump […]
SMU Survey: Mills slam door on buyers looking to talk price
Mills’ flexibility on price for spot orders has taken a nosedive to levels not seen since the end of March 2023.
SMU Survey: Steel Buyers’ Sentiment indicates increased optimism
After reaching multi-month lows in mid-January, SMU’s Steel Buyers’ Sentiment Indices rebounded this week to some of the highest readings recorded in months.
SMU Survey: Mill lead times fluctuate, extensions expected
While we have seen some movements in recent weeks, steel mill production times remain within a few days of the historical lows observed over the last two years, a trend observed since mid-2024.