Economy

December 2016 at a Glance
Written by John Packard
January 3, 2017
The last month of the year was a strong one based on the data we just reviewed and have shared with you in the table at the end of this article.
SMU Price Momentum Index finished both the month and the year pointing toward higher prices in the coming 30 to 60 days.
Our Sentiment Index also finished strong for the month and both single data points and our three month moving average are trending higher.
Flat rolled prices have been moving higher in each of the past three months. Our $594 per ton average for the month of December was the same as Platts and slightly higher than the $586 per ton number that the CME Group settled HRC futures on.
Many of the steel inputs such as iron ore and scrap were higher in December than the prior months. This included zinc which averaged almost $0.05 per pound more than what we saw for the month of November. Iron ore averaged $79.9/dmt for the month and all of the scrap items saw increases of at least $40 per gross ton.
Rig counts (energy markets) rose and averaged 643 rigs which is 60 rigs better than November and 100 rigs better than October.
Inventories remained tight at the domestic steel service centers with MSCI reporting flat rolled at 2.2 month’s supply and SMU reporting our Apparent Excess as only being 1,000 tons. The lower inventories will keep pressure on the mills to increase prices.

John Packard
Read more from John PackardLatest in Economy

Architecture firms struggle through April
For the third month in a row, architecture firms reported a reduction in billings through April, according to the latest Architecture Billings Index release.

House committee blocks GOP budget proposal
The budget proposal has big implications for steel and manufacturing.

Manufacturing in New York state contracts again in May
Manufacturing activity in New York state declined for the third consecutive month, according to the May Empire State Manufacturing Survey from the Federal Reserve Bank of New York. Responding firms continue to forecast weaker business conditions in the coming months.

Chicago Business Barometer falls back in April, remains in contraction
The Chicago Business Barometer declined in April, reversing March’s gains, according to Market News International (MNI) and the Institute for Supply Management (ISM).

Fewer manufacturers optimistic about the economy
PMA’s April report shows that only 16% of surveyed manufacturers anticipate an increase in economic activity in the next three months (down from 23% in March)