Service Centers
November 22, 2015
Spot Pricing Capitulation Continues to Haunt Service Centers
Written by John Packard
Manufacturing companies reported their service center suppliers dropping spot steel prices this past week. Ninety percent of the manufacturing respondents responding to last week’s SMU flat rolled steel market questionnaire reported service centers as dropping spot pricing. This continues a growing trend for distributors to dump inventory at reduced margins (or at no margins at all) in an effort to reduce higher priced inventories.
According to the manufacturers this trend began back in mid 3rd quarter 2015 and reached a point of saturation (80 percent or greater response ratio) at the beginning of the 4th Quarter.
