SMU Data and Models
Steel Mill Negotiations: Price in Play
Written by Tim Triplett
December 6, 2018
Twice per month Steel Market Update canvasses the flat rolled and plate steel markets as we look to identify key market metrics. One of those is whether the steel mills are working with their steel buying customers and are they willing to negotiate steel pricing for orders placed this week for delivery based on existing mill lead times. Steel Market Update data shows the momentum on flat rolled steel pricing has been trending lower for a few months. Therefore, it’s no surprise the vast majority of buyers tell SMU that mills were willing to negotiate pricing on new orders placed this week. The exception is the plate market, where the mills still hold the negotiating advantage.
Steel Market Update tracks how buyers and sellers of flat rolled and plate steel characterize price negotiations with the mills. About nine out of 10 respondents to SMU’s latest market trends questionnaire report that the mills are open to price discussions on hot rolled, cold rolled, galvanized and Galvalume steel products.
Only about 20 percent say the plate mills are flexible, however. For most, plate prices are nonnegotiable as demand for steel plate continues to outpace supply (see chart).
Declining steel prices have given buyers considerable leverage with the mills for most of the year’s second half. SMU will be keeping a close eye on the green bars in the chart next month. If they shorten—meaning mills are less willing to negotiate—that will be a sign that demand and prices may be on the way up in 2019.
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.