Service Center Spot: Are Spot Sales Philosophies Changing?

Flat rolled steel service centers are beginning to believe a change in spot pricing is necessary. We saw a precipitous decline in the percentage of distributors who were lowering their spot pricing to their customers compared to a couple of weeks ago.

One of the proprietary indices created by Steel Market Update is our Service Center Spot Pricing Index. The purpose of the index is to discover how flat rolled steel service centers are handling pricing on spot sales to their end customers. We look at spot sales from two perspectives, that of the distributors and from the manufacturing companies they service. We believe the information collected provides a good picture of the potential weakness or support for pricing in the marketplace. This in turn provides perspective for steel buyers as they prepare to make inventory purchasing decisions, whether from a distributor or from a steel mill.