Service Centers
October 13, 2015
Service Centers Move Closer to Capitulation
Written by John Packard
SMU watches service center spot flat rolled steel prices to their end user customers very closely. As markets ebb and flow we have found that steel service centers reach a point of “capitulation,” which is seen as a point when distributors will support a change in the market environment – including accepting mill price increases.
During our most recent flat rolled steel market analysis, 72 percent of the manufacturing companies responding to our query reported service center spot prices as decreasing. As you can see by the graphic below, the manufacturing companies have been reporting big changes in distributor spot pricing over the past two months. The 72 percent reported this past week is 22 percentage points higher than what we measured during the middle of September and more than twice the level reported at the beginning of September.
