Steel Mill Negotiation Rates Remain Favorable to Buyers

As one buyer commented that mills are “negotiable for large orders,” another remarked they are “holding tight on not letting spot prices slide.”

Broken down by product, 76% of hot rolled buyers surveyed are now responding that mills are willing to negotiate lower prices, down from 86% two weeks prior and down from 79% one month ago. Negotiation rates were in the 92–94% range in the July and early-August surveys.

For cold rolled, 94% of buyers polled reported that mills were willing to bargain, up from an 82% rate two weeks ago. 91% of galvanized buyers reported that mill prices are negotiable, up from 85% two weeks prior, but down from the 92–93% rates seen in recent months.

Galvalume negotiation rates tend to be more volatile due to the smaller market size, with 100% of respondents reporting mills are negotiable this week, unchanged from two weeks ago and up from a 67% rate in mid-August.

Negotiations have been slightly less common in the plate market but have been rising since mid-July. 80% of buyers reported a willingness to negotiate this week, unchanged from two weeks prior and up from 64% one month ago. Plate negotiation rates had been between 54–67% for nearly two months prior to September. Recall we saw plate negotiation rates of 0–18% in March and April.

SMU’s Price Momentum Indicator was adjusted from Lower to Neutral on Aug. 9 and will remain there until the market establishes a clear direction.

Note: SMU surveys active steel buyers twice each month to gauge the willingness of their steel suppliers to negotiate pricing. The results reflect current steel demand and changing spot pricing trends. SMU provides our members with a number of ways to interact with current and historical data. To see an interactive history of our Steel Mill Negotiations data, visit our website here.

By Brett Linton, Brett@SteelMarketUpdate.com