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 […]
The following calculation is used by Steel Market Update to identify the spread between world hot rolled export prices as determined by SteelBenchmarker and domestic (US) hot rolled prices as published by SMU. Steel Market Update compares the world hot rolled export price to which dollars are added for freight, handling, trader margin, etc. The number […]
The following article on the hot rolled coil (HRC), busheling scrap (BUS), and financial futures markets was written by Andre Marshall, CEO of Crunch Risk LLC and our Managing Price Risk I & II instructor. Assisting Andre with tonight’s article is Jack Marshall also associated with CrunchRisk. Here is how Andre and Jack saw trading […]
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 […]
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 […]
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 […]
The following article on the hot rolled coil (HRC), busheling scrap (BUS), and financial futures markets was written by Andre Marshall, CEO of Crunch Risk LLC and our Managing Price Risk I & II instructor. Assisting Andre with tonight’s article is Jack Marshall also associated with CrunchRisk. Here is how Andre and Jack saw trading […]
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 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 […]
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 […]
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 […]
The following article is written by Spencer Johnson of FC Stone LLC. With six years of experience, Spencer provides his customers strategic and tactical advice on protecting themselves against commodity price volatility in the steel markets. Spencer rotates weekly futures articles with Andre Marshall of Crunch Risk, LLC. Spencer can be reached at spencer.johnson@intlfcstone.com. In […]
The following calculation is used by Steel Market Update to identify the spread between world hot rolled export prices as determined by SteelBenchmarker and domestic (US) hot rolled prices as published by SMU. Steel Market Update compares the world hot rolled export price to which dollars are added for freight, handling, trader margin, etc. The number […]
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 U.S. Department of Commerce issued their Preliminary Determination on countervailing duties (CVD) of hot rolled coil from Brazil, Turkey and South Korea. Affirmative results were found against Brazil with CSN and Usiminas both receiving subsidy rates of 7.42 percent. All other Brazilian mills not named also received 7.42 percent subsidy rates. Turkey and South […]
We thought our readers might find it interesting to review the past four years worth of imports from the three countries mentioned in the countervailing (CVD) duty preliminary determination just released by the U.S. Department of Commerce. The numbers in the table below are net tons and are annualized (yes, Brazil only shipped 4,467 tons […]
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 […]
The following article on the hot rolled coil (HRC), busheling scrap (BUS), and financial futures markets was written by Andre Marshall, CEO of Crunch Risk LLC and our Managing Price Risk I & II instructor. Assisting Andre with tonight’s article is Jack Marshall also associated with CrunchRisk. Here is how Andre and Jack saw trading […]
TransCanada says it intends to file a claim for more than $15 billion against the U.S. for what it calls the “arbitrary and unjustified” rejection of the proposed Keystone XL pipeline. The claim, filed under Chapter 11 of the North American Free Trade Agreement, seeks to recover “costs and damages that it has suffered as […]
The Institute of Supply Management released their December report on January 4th 2016 with a value of 48.6 which is the lowest since June 2009. An explanation of the ISM index is given at the end of this piece. After seven straight months of decline the three month moving average (3MMA) of the index had […]
Manufacturing ended the year with general global slowing as production and new orders declined. The JP Morgan Global Manufacturing PMI registered 50.9 in December, down from 51.2 in November. The global PMI average for 2015 failed to surpass the average reading for the prior two years. PMI indices for China, India, Brazil, Russia, Indonesia and […]
The flat rolled steel price roller coaster did not do the steel mills or companies holding inventory any favors this past year. We saw hot rolled prices drop from just below $650 per net ton (average) at the beginning of the year to the low point of $360 per ton achieved the week of December […]
Last year was a major year for labor contracts that affected the steel industry. After months of slowdowns and contentious negotiations on the West Coast in 2014, the PMA/ILWU finally ratified a contract in May of 2015. The labor dispute caused delay of steel shipments and other products, congestion on the docks, and shifted some […]
The first thing that jumps out at you when taking a look at the December steel and economic data is the change in the direction flat rolled steel prices took early in the month as the domestic steel mills raised prices for the first time since the Spring 2015 (which resulted in a dead cat […]
Consumer confidence improved from 92.6 in November to 96.5 in December. The very disappointing November result was revised upwards. The three month moving average (3MMA) declined from 98.1 in November to 96.1 in December. As we have reported in earlier write-ups on this subject, 2015 has been tremendously more variable month to month than 2014. […]
The Chicago Business Barometer (or Chicago PMI) fell at its fastest rate since 2009, down 5.8 points to 42.9 in December. The drop took analysts by surprise who were projecting a reading in the 48 to 50 range. MNI Indicators notes that the December reading is 16.5 points below the January 2015 high of 59.4. […]