Market Data

SMU Flash Report: Service Center Inventories Rise to 3.0 Months

Written by Tim Triplett

January 4, 2018

Six months ago, Steel Market Update began collecting inventory data from a select group of flat rolled and plate steel service centers. Over time, the number of participating distributors has grown and we have been able to expedite the gathering of information from most (not all) of the service centers involved. Our initial goal is to provide the number of months of supply at the flat rolled service centers as of the end of the prior month. In today’s case, we are referencing the number of months of supply as of the end of December. For the first five months we produced just one report. Starting with the end of December data, we are now producing a “Flash” report based on a smaller sample. The information below was already shared with those service centers who are providing inventories information to Steel Market Update. Our intention is to not share our Flash report with the general readership in the future.

If your company is interested in becoming a confidential source of inventories data (flat rolled or plate) please contact John Packard at John@SteelMarketUpdate.com

December saw a modest increase in service center inventories, according to Steel Market Update’s new inventory “flash report.” Service centers that provide information for SMU’s monthly inventory report will be the first to receive this early guidance on inventory trends. The full report will be released around the 12th of each month.

Based on the responses received from reporting service centers to date, the uptick in the months of supply is likely due to the following:

  • December is typically a slow shipping month and on a non-seasonally adjusted basis it can skew the months of supply higher than what we will likely see in the January numbers.
  • There was some building of inventories due to protection of contracts or spot inventory costs.

With 61 percent of our flat rolled service centers reporting, the number of months of supply increased from 2.89 months (2.9 months) to 3.06 months (3.00 months).

Looking at the companies reporting:

  • 48 percent reported an increase in supply from the end of November.
  • 40 percent reported fewer months of supply.
  • 12 percent reported no change in their supply level.

Look for the complete report next week once we have received all of the data from participating distributors.

Tim Triplett

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