One of the important keys to understanding the strength or weakness of the flat rolled market in the United States is to follow the steel mill lead time announcements made to their customers. We can then compare them against prior weeks (and the results of our market trends report which is conducted twice per month) […]
The Institute for Supply Management reports that manufacturing activity in January remained in contraction for the fourth consecutive month. The January PMI was 48.2, signaling continued weakness in the manufacturing sector despite overall growth for the economy. The reading was no surprise to economists, coming in just above expectations of 48.1 in a poll by […]
We ended the month of January on a positive note. SMU Price Momentum Indicator continues to point toward higher prices over the next 30 days. Our Sentiment Index broke through an extended downward (growing pessimism) trend and is now heading higher (more optimistic). We believe a portion of the improvement is due to flat rolled […]
The Chicago Business Barometer bounced back in January after a surprise drop in December. The index rose 12.7 points to 55.6 from the previous reading of 42.9. The welcome surge followed a weak quarter averaging 47.7, the lowest average since Q3 2009. January’s increase, however, may not be sustainable said Chief Economist of MNI Indicators […]
According to Baker Hughes data from January 29, 2016, the U.S rig count for the week was 619 rigs exploring for or developing oil or natural gas. This is a decrease of 18 rigs when compared to last week, with oil rigs down 12 to 498 rigs, gas rigs down 6 to 121 rigs, and […]
Consumer confidence improved from 96.3 in December to 98.1 in January. The three month moving average (3MMA) declined from 96.0 in December to 95.7 in January. The 3MMA of the present situation is almost on its five year trend and that of expectations has now fallen below its 5 year trend (Figure 1). The historical […]
The Steel Market Update (SMU) Price MoMo Index for hot rolled steel in the United States was positive this week for the fourth consecutive week, following a 21 week negative streak. MoMo, a trailing indicator, is measured as a percentage and shows the relation of the current U.S. hot rolled coil (HRC) price movements against the […]
As part of our Premium level service, Steel Market Update (SMU) analyzes the service center shipment and inventory data and provides a short term forecast for carbon flat rolled steel shipments and inventories then we use our proprietary model to determine if distributor inventories are in Apparent Excess or a Deficit situation. Our forecast also […]
On December 16th the Federal Reserve raised the federal funds rate for the first time in almost a decade and as we write the FOMC is meeting once again and will make another announcement tomorrow regarding any change to the rate. None is expected though it is anticipated that four hikes could occur in 2016. […]
The following is the Chicago Federal Reserve statement followed by our own graphical analysis. The CFNAI is an excellent reality check for much of the economic analysis that we routinely provide in The Steel Market Update and is also a reasonably good predictor of the direction of steel demand with a six to nine month […]
We are seeing a divergence in the normal spread between hot rolled lead times and those of cold rolled and coated products. Normally, we would see HRC lead times at just a couple of weeks less than that of the other “higher value” products. With the demise of the energy segment of the industry that […]
China’s economy, the second largest in the world behind the U.S., grew at 6.9 percent in 2015. That was pretty close to its target of 7 percent for the year but also the slowest rate since 1990. Data released by the Chinese government shows fourth quarter growth at 6.8 percent. As recently as 2007 China’s […]
Twice per month, Steel Market Update (SMU) produces our flat rolled steel market analysis. This is done through the use of an online questionnaire which is accessed by an invitation only link. SMU invites just under 600 companies associated with the flat rolled industry with a major focus on manufacturing companies and steel distributors. Our […]
According to Baker Hughes data from January 22, 2016, the U.S rig count for the week was 637 rigs exploring for or developing oil or natural gas. This is a decrease of 13 rigs when compared to last week, with oil rigs down 5 to 510 rigs, gas rigs down 8 to 127 rigs, and […]
Buyers and sellers of flat rolled steel are beginning to feel more optimistic about their company’s ability to be successful both in the current market environment as well as three to six months out into the future. Those in the industry seem to be bucking the national pessimistic trend we see on television every night […]
The vast majority of the respondents to our latest flat rolled steel market analysis believe that the domestic steel mills will be able to collect “some” of the latest round of price increases which range from $20 to $30 per ton. In our latest assessment of the flat rolled market, we asked whether the domestic […]
Based on the results of our flat rolled steel market analysis, all of the flat rolled lead times are averaging longer lead times than what we measured one year ago. The SMU steel market questionnaire found the average lead time on hot rolled coil (HRC) was 3.91 weeks, up from a 3.63 week average reported […]
As lead times move out (see article above) we traditionally find the mills less willing to negotiate flat rolled steel prices. We asked those taking our mid-January flat rolled steel market survey to provide us information regarding the willingness of the U.S. steel mills to discount or negotiate steel prices. Hot rolled, which has been […]
Manufacturing conditions in the Philadelphia region declined modestly in January, according to the Manufacturing Business Outlook Survey conducted by the Federal Reserve Bank of Philadelphia. The diffusion index for current activity rose from a revised -10.2 in December to -3.5 in January. It is the fifth consecutive month of negative readings for the index but […]
The Steel Market Update (SMU) Price MoMo Index for hot rolled steel in the United States was positive this week for the third consecutive week, following a 21 week negative streak. MoMo, a trailing indicator, is measured as a percentage and shows the relation of the current U.S. hot rolled coil (HRC) price movements against the […]
The American Institute of Architects called 2015 a healthy year for construction. In eight of the twelve months last year the Architecture Billings Index (ABI) posted scores above the 50, indicating an increase in design services. The December ABI was 50.9, up from 49.3 in November. The new projects inquiry index gained 1.6 points to […]
Twice per month Steel Market Update conducts a review of the flat rolled steel markets and one of the items on our questionnaire is how far out are steel mill spot lead times. We also follow lead times as published by the domestic mills to their customers which we share with our readers from time […]
Often with steel related economic statistics it’s useful to compare a given data stream with others which may or may not be causally related. This usually puts the steel data into context and shows whether a direction change is for real. In this piece we are comparing the price of Chicago shredded scrap with the […]
Figure 1 shows historical gas and oil prices since January 2000. The daily spot price of West Texas Intermediate (WTI) closed at $31.42 on January 11th, down from $36.31 on December 14th, according to the latest daily figure available from the Energy Information Administration (EIA). There have been reports in the press that oil broke […]
This report compares domestic mill shipments and total supply to the market. It quantifies market direction by product and enables a side by side comparison showing the degree to which imports have absorbed demand. Sources are the American Iron and Steel Institute and the Department of Commerce with analysis by SMU. Table 1 shows both […]
New York manufacturers experienced their worse business conditions since the 2007-2009 recession, according to the January Empire State Manufacturing Survey. All indexes for current conditions were in negative numbers except those for pricing. The survey for general business conditions index fell 13 points to -19.4. Indexes for new orders and shipments plummeted by double digits […]
There is a reason why Steel Market Update looks to the ITR Economics to provide economic forecasts and overviews for our conferences. The company is just darn good at evaluating the data and steering us in the right direction. The Institute for Trend Research (ITR Economics) reported the results of their 2015 forecast made in […]
The Steel Market Update (SMU) Price MoMo Index for hot rolled steel in the United States was positive this week for the second consecutive week, following a 21 week negative streak. MoMo, a trailing indicator, is measured as a percentage and shows the relation of the current U.S. hot rolled coil (HRC) price movements against the […]
The Bureau of Labor Statistics (BLS) analysis of non-farm employment reported on Friday that 292,000 jobs were added in December, which was better than economist’s consensus expectations. October was revised up by 9,000 and November up by 41,000. The three month moving (3MMA) of gains through December was 284,000. The unemployment rate, U3, calculated from […]
According to Baker Hughes data from January 8, 2016, the U.S rig count for the week was 664 rigs exploring for or developing oil or natural gas. This is a decrease of 34 rigs compared to last week, with oil rigs down 20 to 516 rigs, gas rigs down 14 to 148 rigs, and miscellaneous […]