Steel Buyers Respond to Price Increase Announcements

We want to hear your thoughts, too! Contact Brett@SteelMarketUpdate.com to be included in our market questionnaires.

Price Increase Announcements

The market is split on this question: 41% of those polled as of Tuesday afternoon reported the increases are not sticking at all, 42% of respondents responded that increases are partially sticking, and the remaining 17% said the increases are indeed sticking. Numerous buyers commented that weak demand and high mill capacity are hindering the mills’ ability to collect increases. Comments we received from respondents:

“First round of increases send the message. Second round starts to move the needle.”

“More than anything they have stabilized the HRC market. In CRC and CORE there are still some deals being made.”

“I would not say prices are rising, but a floor does look possible.”

“It is having a market stabilization effect. The right move at an opportune time.”

“Deals are still being cut at the bottom. Pre-increase.”

“It slowed down the steady falling prices.”

HRC Prices Bottoming Out?

SMU asked buyers how long they thought it would be until hot rolled prices bottomed out, and for the reasons supporting their opinions. The majority (86%) foresee a rebound in prices by the end of this year, with half of those suggesting it could be by the end of this quarter. The remainder think that the bottom will occur further down the road, in Q1 of next year or later.

Some comments from buyers:

“Lack of demand and increased domestic capacity.”

“In the short term, I believe the market has bottomed.”

“They may only bottom for a bit and then ultimately be pressed again before the end of the year, depending on what happens with union contracts.”

“Another week or two of moderate adjustments before this market starts an upward climb. Though maintenance production will be controlled forcing mill buys.”

“Historically there is pressure on pricing November/December.”

“End use demand stable and companies will need to restock.”

PSA: We will publish our next SMU Market Trends Report this Friday outlining the full results of our ongoing survey. Premium members can view current and past survey reports here on our website. We encourage readers to explore the full results, as we simply cannot write about all of the information within. After logging in at SteelMarketUpdate.com, visit the Analysis tab and look under the “Survey Results” section for “Latest Survey Results.” Historical survey results are also available in the Survey Results section under “Survey Results History.” We will conduct our next market survey next week. Contact us if you would like to have your company represented.

By Brett Linton, Brett@SteelMarketUpdate.com