Steel Products
Manufacturers Optimistic On Demand & Order Flows
Written by John Packard
January 7, 2013
Forty-seven percent of manufacturing companies responding to last week’s steel survey reported demand as showing improvement over the next three months based on current order flows.
During the survey, we asked the entire group being questioned, which consisted of manufacturing companies (44 percent), service centers (40 percent), steel mills (5 percent), trading companies (5 percent), toll processors (5 percent) and suppliers to the industry (1 percent), if demand was improving. As a group 25 percent responded that it was indeed improving while 12 percent felt it was in decline. The balance felt demand remained the same as previous months.
We then took the question directly to those who identified themselves as manufacturing companies and asked them based on current order flows what does demand look like over the next three months? Eight percent responded demand would increase substantially, 39 percent reported it would increase marginally, 39 percent said it would remain the same, 14 percent stated it would decline marginally while no one felt it would decline in a substantial way.
What SMU finds interesting is the contrast between the responses of the manufacturing companies and the service centers that support the manufacturing segment. The service centers are, at least at the moment, are seeing business a little differently than the manufacturing companies. According to the results of our survey, service centers are reporting their manufacturing customers are releasing less steel than one year ago at this time. A full 49 percent of the service centers reported their manufacturing customers as releasing less steel with only 18 percent releasing more material than one year ago and 33 percent the same as one year ago.
The questions are not exactly in sync with one another – and we may find the service centers adjusting their responses in future surveys if the end users are seeing improvements in order flows and demand. These improvements could create a need for steel orders if the two parties are not communicating to the degree necessary. This is something worth watching in the coming weeks.
John Packard
Read more from John PackardLatest in Steel Products
SMU Week in Review: September 1-5
Here are highlights of what’s happened this past week and a few upcoming things to keep an eye on.
HR Futures: Market finds footing on supply-side mechanics
As Labor Day marks the transition into fall, the steel market enters September with a similar sense of change. Supply-side fundamentals are beginning to show signs of restraint: imports are limited, outages loom, and production is capped, setting the stage for a market that feels steady on the surface but still unsettled underneath.
Beige Book: US markets remain cautious amidst volatile pricing environment
Sluggish economic activity across the US was largely attributed to uncertainty caused by tariff policies and growing cost pressures, according to the US Federal Reserve’s (The Fed) latest Beige Book report. The Fed’s latest economic report, posted on Sept. 3, consists of economic findings from the six weeks preceding Aug. 25 throughout 12 districts. Economic […]
Rig count dips again in both US and Canada
Oil and gas drilling activity waned in the US and Canada this past week. Ticking own for the second straight week in both regions.
Steel caucus pushes US trade officials to maintain strong S232 program
The bipartisan Congressional Steel Caucus is pushing for US officials to maintain a robust Section 232 program as they negotiate trade deals with America's trading partners.