SMU Data and Models
Steel Mill Negotiations: “They Can Charge Whatever They Want”
Written by Tim Triplett
January 7, 2021
With steel in such tight supply as 2021 gets off to a fast start, it’s clearly a seller’s market, with little to no price negotiation between buyers and the mills.
Based on Steel Market Update’s check of the market this week, average hot rolled steel prices have surpassed $1,000 per ton. SMU has received anecdotal reports of service centers and OEMs paying nearly $1,200 per ton to secure critically needed hot rolled. Similar premiums have been reported for most other flat rolled products as well.
Virtually all the steel buyers responding to SMU’s market trends questionnaire this week said the mills are unwilling to deal on almost any product, as indicated by the predominantly blue bars below. As one buyer said, “Right now they can charge whatever they want.”
With demand staying strong into the new year, steel is expected to remain in short supply for some time, at least until more mills bring on additional capacity.
Note: These negotiations are based on the average from manufacturers and steel service centers who participated in this week’s SMU market trends analysis. To see an interactive history of our Negotiations data, visit our website here.
By Tim Triplett, tim@steelmarketupdate.com
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.