SMU Data and Models
Steel Mill Negotiations: Mills Still Holding the Line
Written by Tim Triplett
October 1, 2020
Mills continue to stand firm in price talks on hot rolled, cold rolled and coated steel orders as they seek to collect the $40-50 price increases they announced two weeks ago, report respondents to Steel Market Update’s market trends questionnaire. Based on SMU’s latest check of the market, the benchmark price for hot rolled steel now averages around $650 per ton. That’s up sharply from $440 a ton two months ago, but little changed over the past two weeks, suggesting that the uptrend in steel prices may be nearing a peak.
About 82 percent of the hot rolled steel buyers responding to SMU’s poll this week said the mills are not willing to deal on HR. That’s up five points from 77 percent two weeks ago, but down slightly from 87 percent at this time last month. Only 18 percent said the mills are now willing to bargain to secure an HR order.
In the cold rolled segment, 74 percent said the mills are not willing to talk price. That’s up a slight two points in the past two weeks. The other 26 percent reported some room for price negotiation on cold rolled.
The percentages are similar in galvanized, where 80 percent said the mills are just saying no, while the other 20 percent reported mills open to discounts. Virtually all those responding to the question on Galvalume reported little room for negotiation as supplies remain tight.
Talks have loosened a bit in the plate market, where 71 percent said the mills are now open to negotiation, while just 29 percent said the mills are currently holding the line on plate. Plate has stalled at around $635 per ton, based on SMU’s market checks, despite the mills’ efforts to move prices higher.
At this time last year, with sub-$500 hot rolled, the dynamic was the exact opposite, with buyers in the strong negotiating position.
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.