U.S. Distributor Flat Rolled Inventories Rise on Weak Shipments

Total steel inventories were reported to be 9,192,400 tons (net tons) which is essentially unchanged from August 2015 but is 1.6 percent lower than September 2014. The months of inventory on hand (all products) at the domestic distributors remained the same as August at 2.8 months.

Carbon Flat Rolled

U.S. flat rolled steel service centers shipped 2,119,300 tons of carbon flat rolled during the month of September. The daily shipment rate was 100,920 tons per day which is 2.8 percent lower than the 103,870 ton daily rate for August and is well below (-9.7%) the 111,700 net tons shipped during the same month one year ago. The September daily shipment rate was the lowest level seen during calendar year 2015 to date.

Flat rolled inventories rose from 5,781,500 tons in August to 5,928,900 tons in September. The 2.5 percent increase has to be considered a bit of a surprise as most believed service centers were actively trying to reduce inventories during the month. September 2015 inventories were 5.5 percent higher than one year ago levels. Flat rolled inventory levels have now risen in each of the past three months. This is not a good sign and one of the reasons why there continues to be pressure on flat rolled prices (in our opinion).

Based on the flat rolled inventory levels reported by the MSCI as of the end of September domestic service centers are holding 2.8 months of inventories on their floors.

When looking at the Year to Date (YTD) data shipments were 6.2 percent lower than in the same time period last year and inventories of flat rolled are 5.5 percent higher.

Carbon Plate

U.S. service centers shipped 333,200 tons of carbon steel plate during the month of September. This is p 2.4 percent above the less than stellar 325,300 tons shipped during the month of August but well below year ago levels when distributors shipped 385,100 tons of plate.

Plate inventories fell to 1,010,400 tons during the month. This represents a 3.8 percent decline in plate inventories since August and are down 18.5 percent compared to one year ago levels.

The number of months on hand dropped from 3.2 month to 3.0 months according to the MSCI data.

Carbon Pipe & Tube

U.S. steel service centers shipped a total of 217,100 tons of pipe and tube products. This is 2.0 percent lower than one month ago and 11.2 percent less than what the distributors reported one year ago. The daily shipment rate was reported to be 10,340 tons per day.

Pipe and tube inventories stood at 676,000 tons as of the end of September. This is 20,000 tons lower than the prior month but, distributors were only 0.5 percent lower than where they were one year ago.

Based on end of September inventory levels, MSCI reported the number of months on hand to be 3.1 which is slightly lower than the 3.2 average reported for August.