Distributor Spot Pricing Support Drops

Steel Market Update conducted an analysis of flat rolled and plate steel market trends last week. One of the key trends we watch closely is the relationship between how service centers are handling spot prices to their customers and what support is being given to domestic steel mill price increases. With the two increases announced in January and February on flat rolled, the analysis is quite telling, and we believe is an indicator of where flat rolled steel prices will go from here.

When we do our service center spot pricing analysis, we look at what manufacturing companies are telling us and then compare that against the service centers. We do this because service centers have a tendency to be more optimistic than what may actually be happening. However, we find the trend is almost always confirmed by the end users. The question is to what degree are prices being raised or lowered?