SMU Data and Models
Steel Mill Negotiations Essentially Non-Existent
Written by John Packard
June 10, 2021
Steel buyers reported to Steel Market Update this week that the trend for steel mills to limit or totally remove any negotiations on spot steel prices continues.
Steel pricing power is totally in the hands of the steel mills as supply continues to be less than the demand for mill products.
Steel Market Update went out to steel buyers representing manufacturing companies and steel service centers, and they reported (again) almost unanimously that prices were being held firm with no wiggle room.
When we look at negotiations by product, we found 94 percent of our hot rolled respondents reporting no ability to negotiate with their steel mill suppliers. Cold rolled was 95 percent reporting no ability to negotiate. Galvanized, Galvalume and plate steel buyers were unanimous (100 percent) that there was no ability to negotiate spot pricing with their steel mill suppliers.
One major reason for the hard line taken by steel mills: extended lead times. In other words, mills have strong order books and do not need to entice spot buyers with lower prices to place new orders.
The SMU Steel Mill Negotiation data is derived from our flat rolled and plate steel market trends analysis survey which we conduct every other week. If you would like to become a confidential data provider please contact us at info@SteelMarketUpate.com. To see an interactive history of our spot price negotiations data, visit our website here.
By John Packard, John@SteelMarketUpdate.com
John Packard
Read more from John PackardLatest in SMU Data and Models
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.” Past survey results are also available under that selection. If you need help accessing the survey results, or if […]
SMU Survey: Steel Buyers’ Sentiment Indices rebound
Following months of fluctuations, SMU’s Steel Buyers’ Sentiment Indices rebounded this week, now at multi-month highs. Both of our Indices remain in positive territory and indicate that steel buyers are optimistic about the success of their businesses.
SMU Survey: Mill lead times remain stable and short
Steel buyers participating in our market survey this week reported stable mill lead times for both sheet and plate steel products.
SMU Survey: Most buyers report mills still willing to talk price
Most steel buyers SMU polled this week reported that mills remain willing to negotiate new order pricing.
October service center shipments and inventories report
Flat rolled = 63.4 shipping days of supply Plate = 52.4 shipping days of supply Flat rolled shipments and inventories Flat-rolled steel supply at US service centers remains seasonally high. October inventories increased after edging lower in September – a dynamic driven largely by disappointing demand. October’s report reflects lower demand and stable lead times […]