SMU Data and Models

Steel Mill Negotiations: Flat Roll's a Buyer's Market

November 25, 2018

Steel mills remain open to price negotiations on hot rolled, cold rolled and coated products, but not plate, report buyers canvassed by Steel Market Update this past week. Steel Market Update tracks how buyers and sellers of flat rolled and plate steel characterize price negotiations with the mills. The steelmakers’ greater willingness to compromise on flat rolled prices reflects seasonal weakness in demand as the year’s end approaches.

In the hot rolled category, 87 percent of buyers said they have found mills willing to talk price, up from 78 percent two weeks ago. Only about 13 percent say the mills are now holding the line on HR.

In the cold rolled segment, 95 percent said they have found mills open to price negotiation, up from 85 percent in early November. Only about 5 percent of respondents reported current mill prices on cold rolled as firm.

The same trend is true in coated products. In the galvanized sector, 84 percent said the mills were open to price discussions, up from 73 percent earlier in the month. Only about 16 percent of GI buyers report that prices are nonnegotiable. For Galvalume, virtually all respondents reported AZ prices as open to negotiation.

In flat roll, it’s a buyer’s market. But the dynamic between buyers and sellers is the opposite in the plate market, where 82 percent say the mills are unwilling to talk price. Demand for plate steel continues to outpace supplies, with buyers on allocation and lead times extended.

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.