SMU Data and Models

SMU Service Center Inventories Remain at 2.7 Months of Supply

Written by John Packard

Service centers held essentially the same number of months of supply of flat rolled steel inventories at the end of April as they did as of the end of March 2018.

SMU Service Center Months of Supply Index for flat rolled (sheet) steel is 2.7 months based on responses from 95 percent of the steel distributors registered to participate in our monthly analysis.

Of the reporting service centers, 44 percent reported their inventories as being lower than the previous month, 29 percent reported inventories as being the same and 27 percent told SMU their inventories rose by the end of the month.

For the first time, Steel Market Update is also providing a plate index as a complement to our sheet index. Based on 100 percent of the service centers reporting, plate steel inventories averaged 2.2 months of supply at the end of April 2018.

Ccoilsomments Made During the Data Collection Process:

• “This market is a little complex for plate. Retroactive quotas, extensions, better European markets, Mittal closing the Conshocken mill, the southern mills making line pipe and spiral weld coil, etc… Interesting times. I think that we will see another quick flurry, and maybe an increase, coming in August. Lots of SC non-believers, we are starting to see inventory holes again judging by the pace of SC inquiries. We see a 4Q pullback (maybe).”

• “Outbound shipments remained strong in April and incoming mill shipments continue to be delayed due to trucking and production issues. May should be another strong month.”

• “We had a strong April and other than transportation issues we see it remaining steady through May.”

• “Experiencing some issues getting freight out of Pennsylvania. No issues getting mills to take 3-4 week lead times on hot rolled orders if we pay spot prices.”

• “Demand has been good to steady and both domestic and foreign shipments have been coming in. Foreign shipments were larger than anticipated, but we do believe they will begin to slow going into the third quarter as there are so many questions and very few answers to 232, circumvention, etc., that put many offshore supply chains at risk. Also, we have major labor contracts due at the end of August for USS and AM, which may spur inventory builds during the third quarter, that may push the market without a major correction until fourth quarter at the earliest. But who knows?”

• “Nothing unusual in April. Our inventory is climbing as we went long for a few customers with larger purchases a couple months ago.”

• “April shipments were up 11 percent over March. April ‘18 was +19.35 percent above April ’17 volume. It was our first YOY gain for the year and our best overall shipment month since Aug ’17.  So, we are optimistic about May.”

• “More spot business opportunities than usual, so we continue to buy near the high end of our mill contracts. Month of May looks strong.”

• “March sales were very strong (once again broke record of largest sales month for all four of my locations); 35 percent above expectations for steel side, Ranch side was flat. Trucking and rail is getting ridiculously difficult and tight. Supply is very tight and panic buying is still happening for HR. HR supply is at concerning levels with last imports landed a few weeks ago with little inbound until fall. All mills shipping late still except for Nucor; they continue to ship on time. No allocation for any mill now.”

• “Business conditions good, mills producing on time but now cannot get it shipped. Both truck and rail are disasters!!!”

Latest in SMU Data and Models

SMU market survey results now available

The latest SMU market survey results are now available on our website to all premium members. After logging in at, visit the pricing and analysis tab and look under the “survey results” section for “latest survey results.” Historical survey results are also available under that selection. If you need help accessing the survey results, or if your company would like to have your voice heard in our future surveys, contact