SMU Service Center Inventory Levels Creep to Highest Levels in 2 Years

We are still a couple weeks away from receiving MSCI inventory and shipment data for the month of December. Even so, our most recent steel market survey should provide some insights into what we may see in the MSCI data when it is released later this month. According to those service centers responding to our SMU steel market survey conducted this past week, flat rolled inventories stood at 2.37 months supply on a non-seasonally adjusted basis (we do not adjust for the size of the company responding to our survey). This is the highest level Steel Market Update has measured over the past two years and, from our perspective, we expect the MSCI inventory levels to exceed 2.5 months on a seasonally adjusted basis and possibly go as high as 2.8 months on a non-seasonally adjusted basis.

We defer to the MSCI data as being more detailed than ours. However, we have a wide variety of service centers responding to our survey and each is treated equally – our results are not based on a weighted average based on the size of the service centers responding to our survey.