SMU Data and Models
Steel Mill Negotiations: Pricing's on the Table
Written by Tim Triplett
May 9, 2019
With steel prices moving down or sideways and demand softening in some markets, it’s no surprise that most mills are willing to talk price to win business in the current environment. Eight out of 10 of the flat rolled steel buyers responding to Steel Market Update’s questionnaire this week report that prices are in play on hot rolled, cold rolled and coated steels. As seen by the upward slope of the green bars in the chart below, negotiations on steel products have been loosening up since March.
About 89 percent of respondents said the mills are open to price negotiations on hot rolled, up from 86 percent two weeks ago. Just 11 percent said the mills are currently holding the line on HR.
In the cold rolled segment, 83 percent now report the mills open to price negotiations, up from 73 percent two weeks ago. Just 17 percent report current cold rolled prices as firm.
In the galvanized sector, 83 percent said the mills are flexible on price, a big jump from just 68 percent in the last poll. Just 17 percent report that galvanized prices are now nonnegotiable. Nearly the same percentage said the mills are now willing to talk price on Galvalume as well.
Even negotiations on plate have loosened a bit, with 60 percent of buyers now reporting some flexibility in plate prices.
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’s December at a glance
SMU’s Monthly Review provides a summary of important steel market metrics for the previous month. Our latest report includes data updated through December 31st.
SMU Survey: Steel Buyers’ Sentiment Indices contrast at year end
Both of our Sentiment Indices remain in positive territory and indicate that steel buyers are optimistic about the success of their businesses.
SMU Survey: Mill lead times contract slightly, remain short
Steel mill production times have seen very little change since September, according to buyers participating in our latest market survey.
SMU Survey: Buyers report mills are slightly less flexible on pricing
Steel buyers of sheet and plate products say mills are still willing to bend on spot pricing this week, though not quite as much as they were two weeks prior, according to our most recent survey data.
December energy market update
Trends in energy prices and active rig counts are leading demand indicators for oil country tubular goods (OCTG), line pipe and other steel products