Service Center Spot Steel Resell Prices Reaching the Point of Capitulation?

Both manufacturing companies and flat rolled steel service centers are reporting more than 75 percent of the distributors as offering ever lower spot steel prices. The 75 percent level is important to Steel Market Update as we have pegged it as the level, when reached and maintained, as being the point of Capitulation. That point where service centers can no longer tolerate the devaluation of their inventories and begin suggesting it is time for the domestic steel mills to raise flat rolled steel prices which the service centers will then support.

Seventy-eight percent of the manufacturers who responded to last week’s flat rolled steel market trends survey reported their distributor suppliers as offering lower spot prices. This is six points higher than two weeks ago and double what was reported at the beginning of September (39 percent).