Steel Products
Indicators Suggest Manufacturing has Slowed
Written by Peter Wright
August 16, 2013
Industrial production and manufacturing capacity utilization for July 2013 – Both these data points are reported in the Federal Reserve G17 data base. The IP index was reported as 98.95 for July, up from 98.91 in June this was 1.8 percent below the peak of September 2007.
Manufacturing is still making progress. The three month moving average of the IP index has been flat for four months and its year over year growth rate has slowed for three straight months (Figure 1). Of the manufacturing data streams that we at SMU track, this is the least upbeat. The ISM manufacturing index was up by 3.1 percent in July, auto production was growing at an 8.1 percent annual rate through June, durable goods were up by 7.4 percent in three months through July and the Chicago Fed manufacturing index was up by 3.0 percent. Manufacturing added 18,000 jobs in July. Overall manufacturing indicators suggest that manufacturing year over year has slowed but still has a growth rate of > 2 percent.
Moody’s Economy.com concludes as follows: “Manufacturing is strengthening, but the July industrial production report shows that the turn up is progressing a bit more slowly than anticipated. Fortunately, signs point to manufacturing strengthening. Auto production schedules show a pickup in August, and the early regional manufacturing surveys for the month are generally encouraging for growth. The headline readings for both the New York Fed and Philadelphia Fed remained in positive territory. Forward-looking details weakened some but are consistent with increased production ahead. The backdrop is increasingly supportive of manufacturing improvement. Earlier weakness in production has left inventories lean, implying that manufacturers will need to ramp up production if demand strengthens. Prospects are encouraging in this regard. Export growth accelerated sharply into midyear thanks to better growth overseas and in Europe in particular, and consumer spending is off to a good start this quarter based on the July retail sales figures.”
Manufacturing capacity utilization was 75.77 percent in July with a 3MMA of 75.88 percent. The three month moving average was down very slightly from June and was exactly the same as July last year (Figure 2).
{amchart id=”86″ Manufacturing Capacity Utilization- Monthly 3MMA}

Peter Wright
Read more from Peter WrightLatest in Steel Products

CRU: EC to toughen steel safeguards
The European Commission proposes cutting its steel import quota by almost half, with volumes exceeding the limit facing 50% duties. The region’s steel industry welcomes the move, while other steel-producing nations fear the consequences. CRU published an insight before this announcement, noting that more restrictive trade policy could significantly raise the cost of marginal supply […]

US and Canadian rig counts stabilize
US counts continue to hover just above historic lows, while Canadian figures remain comparatively healthy.

Plate market sources critique mill hikes amid current market conditions
Following spot market plate price increase notices issued by domestic mills this past week, participants are contemplating the rationale behind the increases and whether they will stick. Some sources anticipate that current market conditions will shift in November and believe the increases may set a new "pricing floor."

Oregon Steel Mills lifts plate prices by $60/ton
Oregon Steel Mills has joined other producers in announcing a price increase of at least $60 per short ton on steel plate.

CRU: Construction of pilot plant for green steel process starts
Voestalpine and partners have begun building an industrial-scale Hy4Smelt demonstration plant in Linz, Austria, which they hope will become key in the decarbonization of steel.