Economy
ISM Steel Buyers Expecting Flat or Decreased Orders Until the End of 2013
Written by Sandy Williams
October 10, 2013
Steel buyers surveyed in the September Institute for Supply Management’s Steel Buyer’s Forum are expecting orders to remain flat or drop in the next three months. Buyers who felt orders would remain the same increased to 53.3 percent from 41.2 percent in August; those who predicted a drop increased to 20 percent from 11.8 percent and 26.7 percent predict orders will go up.
Inventories remain on the lean side in September with 40 percent reporting tons on hand for 0-1 month, 33.3 percent for 1-2 months and 26.7 percent for 2-3 months. Most, 73.3 percent, reported inventory was about right compared to demand; 26.7 percent felt it was still too high. Sixty percent of respondents said they will maintain current inventory levels over the next six months but 40 percent plan to reduce it. Incoming order levels were below levels required for most efficient level of operation for 60 percent of those surveyed, and about right for 26.7 percent.
Backlogs are expected to stay the same or decrease over the next three months. Shipping levels are the same or higher than three months ago and a year ago.
Selling price for products was considered competitive by 73.3 percent and weak or very weak by the rest of those surveyed.
For the first time since April, respondents (6.7 percent) reported workers on short time or layoff. About a third of those surveyed expect to build or buy new manufacturing facilities within the next year.
For six month predictions, 66.7 percent expect sales and production to remain the same while 33.3 percent expect an increase. Respondents see the trend of general economic activity remaining unchanged.
Dependence on off-shore sources is expected to be the same for the next six months. Foreign mill prices are the same as domestic said 60 percent of respondents, while 40 percent said foreign mill prices are below U.S. levels.
Sandy Williams
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