Steel Buyers: Actively Playing or Watching From the Sidelines?

Steel Market Update’s survey this week asked participants how they are doing under current market conditions. SMU’s current buyer’s gauge shows that 55% of participants are active buyers, while 45% are on the sidelines.

When comparing current buying patterns to recent weeks, the number of engaged participants has tapered off.

At the beginning of Q2, 62% of buyers were active and 38% were idle. Towards the end of the quarter, buying slowed to 57% active and 43% inactive. Then, the start of the third quarter took us back up to 69% engagement with 31% waiting to make deals. Though there are always fluctuations in the market, the closest we’ve been to those figures was back in the third quarter of 2022 when it was 56% to 44%, respectively.

Is it the effects of outside factors or something else?

Here’s what active participants had to say:

“We are active in restocking outages and contract obligations.”

“Service centers are always buying at least some steel.”

“Demand has been decent.”

“We’re buying for contractual obligations only.”

Less engaged buyers shared their thoughts as well:

“Our inventory is in good shape. We’re waiting for the market to reveal itself, one way or another.”

“The demand or willingness of customers to build inventory right now is not there.”

“Like the last few months, we’re just buying hand-to-mouth. Local service centers are lowering their prices every week.”

“Our inventory levels are good and demand is slowing.”

“We’ve already purchased for the first quarter.”