Steel Mill Negotiations: It's a Buyer's Market

In the cold rolled segment, 86 percent said the mills were negotiating, up from 72 percent in mid-August, while just 14 percent said the mills are still standing firm.

Suppliers of coated steel are much more likely to discuss discounts than they were a month ago. Eighty-four percent said their galvanized suppliers are willing to deal, a jump of 30 percentage points from mid-August. Just 16 percent of respondents reported galvanized mills declining to compromise on price. Seventy-eight percent said the mills are now also open to price talks on Galvalume.

Three out of four buyers now report the plate mills open to negotiation, as well.

SMU data shows the benchmark hot rolled price has declined to about $550 per ton from around $700 per ton at the beginning of the year. The mills have given back all the short-term increases they saw following their three $40 price increases in June and July. SMU’s Price Momentum Indicator is pointing Lower for all products as prices are expected to decline further over the next 30 days.

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 (example below), visit our website here.