SMU Data and Models

Service Center Spot: Threat to Pricing Strength?
Written by John Packard
July 15, 2018
Manufacturing companies have a different perspective on service center spot pricing than what the service centers themselves reported to Steel Market Update during the first week of July.
We are about to survey steel buyers as we work on our mid-July flat rolled and plate steel market trends analysis. Prior to the new survey, we thought our readers might be interested in what we captured a little earlier this month.
Seventy-five percent of the manufacturing companies responding to our early July survey reported service center spot prices as rising compared to what they were seeing two weeks earlier. This was an increase in what we reported during the middle of June when 54 percent of the manufacturing companies reported service center prices as rising.
Service centers, on the other hand, were much more skeptical with only 34 percent of the responding distributors reporting their spot pricing to their customers as rising. This is down from 65 percent who reported spot prices as rising in the middle of June.
We have seen a significant amount of turmoil within the service center community as they report what their company is doing regarding spot pricing. Over this three-month time period, we have seen some erosion in mill pricing, depending on the product. Hot rolled and plate steels have been much more consistent, while cold rolled and coated products have seen mill average pricing seesawing with a combination of gains and losses depending on the week and the supplier.
The question we have to ask ourselves is, does the weakness in the service center response act as an early warning of weakness in mill pricing in the coming weeks?

John Packard
Read more from John PackardLatest in SMU Data and Models

SMU Survey: Sheet lead times ease further, plate hits one-year high
Steel buyers responding to this week’s SMU market survey report a continued softening in sheet lead times. Meanwhile, plate lead times have moderately extended and are at a one-year high.

SMU Survey: Buyers report more price flexibility from mills
Nearly half of the steel buyers responding to this week’s SMU market survey say domestic mills are showing increased willingness to negotiate pricing on new spot orders. This marks a significant shift from the firmer stance mills held in prior weeks.

SMU Survey: Buyers’ Sentiment Indices fall
Current Sentiment Index dropped six points to +42 this week compared to two weeks earlier. It has fallen in every successive survey since reaching a 2025 high of +66 on Feb. 19.

March service center shipments and inventories report
Steel service center shipments and inventories report through March 2024.

Apparent steel supply contracts in February
The amount of finished steel that entered the US market in February receded from January’s peak, according to our analysis of Department of Commerce and American Iron and Steel Institute (AISI) data.