Steel Buyers Say Mills Less Willing to Negotiate Prices

The percentage of steel buyers finding mills willing to negotiate prices slipped below 25% this week, according to SMU data. 

Across the products surveyed by SMU, cold rolled took the largest tumble, falling 10 percentage points to 19% of respondents saying mills were willing to talk price.  

Every two weeks, SMU asks steel buyers whether domestic mills are willing to negotiate lower spot pricing on new orders. This week, 24% of steel buyers (Figure 1) across both sheet and plate markets reported mills were willing to negotiate lower prices on new orders, slipping further from 26% two weeks earlier. 

The last time this percentage dipped below 25% was in April of last year when it stood at 23%. The rate has been declining since the middle of February. 

Figure 2 below shows negotiation rates by product. Of the other products surveyed by SMU, hot rolled fell one percentage point to 26% of respondents saying mills were willing to negotiate lower prices vs. the last market check; galvanized stayed level at 33%; and plate crept up one percentage point to 8% in the same comparison. Galvalume, however, increased to 50% of steel buyers saying mills were willing to talk price vs. 29% two weeks earlier. Recall that the Galvalume market is more volatile as there are fewer participants.

Note: SMU surveys active steel buyers every other week 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 Ethan Bernard, ethan@steelmarketupdate.com