SMU Data and Models
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/fc2689f7c2668c1156c9f54144dac829.jpg)
Service Center Spot - Pandemic Overrides Capitulation
Written by John Packard
April 19, 2020
If not for the pandemic, SMU would be calling the service centers as being at a point of capitulation. Our expectation would be for the steel mills to announce price increases in the near future. If not for the pandemic.
We have seen both manufacturing companies and service centers reporting spot prices out of the service centers as being lower than two weeks ago. When we find 75 percent or a greater percentage of the steel distributors reporting their company as offering lower spot prices, we normally peg that point as being when service centers are willing/anxious to have the domestic mills announce price increases.
However, we are not in a normal world. With COVID-19 the rules have changed.
Granted, service centers would very much like to see spot steel prices move higher, but the pandemic and the associated demand destruction is creating a market where distributors are over-inventoried and not capable of putting more steel on their floors.
We will have to wait out this market to see what happens next.
Eighty-eight percent of the manufacturing companies responding to last week’s questionnaire reported service centers as lowering spot pricing. We have not seen spot numbers at this level since late second quarter 2019.
Service centers also reported their companies as lowering spot prices to their end customers. Last week 79 percent of the distributors reported lowering prices.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/04/john-packard.png)
John Packard
Read more from John PackardLatest in SMU Data and Models
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/01/cropped-SMU_Mobile_final.png)
SMU’s August at a glance
SMU’s Monthly Review provides a summary of important steel market metrics for the previous month. Our August report includes data updated through August 30th.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Premium1.png)
SMU market survey results now available
SMU’s latest steel buyers market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the pricing and analysis tab and look under the “survey results” section for “latest survey results.”
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/01/cropped-SMU_Mobile_final.png)
SMU survey: Lead times edge higher for sheet
Current steel mill lead time averages are a few days longer than levels seen one month prior, but remain near historical lows for both sheet and plate products.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/01/cropped-SMU_Mobile_final.png)
SMU survey: Steel Buyers’ Sentiment Indices surge
Both our Current and Future Indices are now up to multi-month highs, indicating continued optimism among steel buyers.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/01/cropped-SMU_Mobile_final.png)
SMU survey: Mills’ flexibility on prices up slightly
Steel buyers found mills slightly more willing to negotiate spot prices this week, according to our most recent survey data. Though this negotiation rate has ticked up vs. our previous market check, overall rates have been trending downward since July’s highs.