Economy
May 2016 at a Glance
Written by Brett Linton
May 31, 2016
SMU Price Momentum continues to reflect the strength of steel mills as we expect prices to continue to rise over the next 30 days. Our Price Momentum Indicator has been pointing toward higher prices since early December 2015 (6 months and counting).
Although our Steel Buyers Sentiment Index took a hit in May for both Current Sentiment (how buyers and sellers of flat rolled steel feel about their company’s ability to be successful in the existing market environment) and our Future Sentiment (three to six months out into the future), our three month moving average (3MMA) continues to trend higher, up +3 points from our April average.
Flat rolled prices soared during the month of May finishing the month at $630 per ton. Our average, at $612 per ton, was $22 per ton higher than the CME settlement for the month and was $3 lower than Platts average over the same time period.
Scrap prices rose, as did zinc and capacity utilization rates.
Aluminum, iron ore, rig counts, apparent excess, service center inventories (a Premium product), AIA Billings Index, and the ISM Mfg Index all fell.
It will be interesting to watch the CME HRC futures markets as hot rolled prices are expected to rise slightly during June ($590 to $608) before dropping back and settling in the mid $500’s.
Brett Linton
Read more from Brett LintonLatest in Economy
Metalformers expect steady conditions in coming months
Metalformers expect economic activity to stabilize over the next three months, according to the recently released July Business Conditions Report from the Precision Metalforming Association (PMA).
Architecture Billings Index rises from 4-year low in June
The Architecture Billings Index (ABI) ticked up in June following May’s four-year low, according to the American Institute of Architects (AIA) and Deltek. While the index improved this month, it continues to indicate weak business conditions among architecture firms.
Beige Book: Uncertainty to continue fueling slower economic growth
Growth in the US economy continues to be constrained. The Federal Reserve’s Beige Book report for July shows more areas reporting flat or declining economic activity than in its previous report at the end of May.
AISI, AISC, University of Massachusetts get ~$6.4M EPA grant
The American Iron and Steel Institute (AISI), American Institute of Steel Construction (AISC), and the University of Massachusetts at Amherst have received a grant to enhance emissions reporting for steel construction projects.
Manufacturing activity in New York state continues to soften
New York state saw a continued decline in manufacturing activity in July, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York.