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. […]
The Texas Manufacturing Outlook Survey, conducted by the Dallas Fed, showed mixed results in December. The general business activity index plunged to -20.1 from -4.9 in November indicating a continued weakness in manufacturing. Analysts expected a decrease but only to around -6.0. In contrast, the index for production rose 8.2 points to 13.4 during the […]
On December 16th the Federal Reserve raised the federal funds rate for the first time in almost a decade. In the United States, the federal funds rate is “the interest rate” at which depository institutions (banks and credit unions) actively trade balances held at the Federal Reserve, called federal funds, with each other, usually overnight, […]
The Bureau of Economic Analysis (BEA) released the third estimate of Q3 2015 Annual Revision of the National Income and Product Accounts on Monday. The annualized growth rate in the 3rd estimate of the 3rd quarter was 1.99 percent, down from 3.91 percent, in the 3rd estimate of Q2. GDP is measured and reported in […]
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 […]
Each month the Bureau of Labor Statistics (BLS) puts out its series of producer price indexes, for thousands of goods and materials. For an explanation of this program see the end of this piece. The latest release last week reported results through November. We run this analysis every three or four months to give readers […]
Chinese steel trade data was recently released for the month of November 2015, providing updated data on iron ore imports, scrap imports, and flat rolled imports and exports. Chinese imports of iron ore in November were 82,130,000 metric tons, an increase of 8.8 percent from the previous month and an increase of 21.9 percent from […]
Both of these data points are reported in the Federal Reserve G17 data base. The index had an all-time high of 107.9108 in November last year but on a month over month (m/m) basis has declined for nine of the first eleven months of 2015. This contrasts sharply with last year when in only one […]
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 will rotate weekly futures articles with Andre Marshall of Crunch Risk, LLC. Spencer can be reached at spencer.johnson@intlfcstone.com. […]
Demand for architecture design services fell again in November. The Architecture Billings Index score was 49.3, down from 53.1 in October and 53.7 in September. The Index has been up and down throughout 2015. The new projects inquiry index was 58.6, up just barely from 58.5 in October. “Since architecture firms continue to report that […]
Manufacturing activity in the New York area declined for the fifth consecutive month in December. The rate of decline slowed somewhat as indicated by the headline general business index of the Empire State Manufacturing Survey, climbing six points to register -4.6. The new orders continued to fall to an index reading of -5.1. Shipments, however, […]
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 […]
The following article on the hot rolled coil (HRC), busheling scrap (BUS), iron ore and financial futures markets was written by Andre Marshall, CEO of Crunch Risk LLC and our Managing Price Risk I & II instructor. Here is how Andre saw trading over the past week: Financial Markets: The stock market is taking a […]
Earlier this week Steel Market Update (SMU) attended the annual HARDI conference in Orlando, Florida. The well attended conference focused on a number of areas affecting the HVAC Wholesalers including presentations on the economy by Alan Beaulieu of the Institute for Trend Research (ITR) and Steel Market Update regarding the status of the galvanized sheet […]
AISI and eight other steel associations met with government officials in Paris on December 1 to present arguments against granting China Market Economy status. The press release from AISI follows: PARIS – The American Iron and Steel Institute, the Steel Manufacturers Association, the Canadian Steel Producers Association, CANACERO (the Mexican steel association), Alacero (the Latin […]
The Bureau of Labor Statistics (BLS) analysis of non-farm employment reported on Friday that 211,000 jobs were added in November, which was in line with economist’s consensus expectations. Both September and October were revised up by a total of 38,000. The three month moving (3MMA) of gains through November was 218,000. The unemployment rate, U3, […]
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 will rotate weekly futures articles with Andre Marshall of Crunch Risk, LLC. Spencer can be reached at spencer.johnson@intlfcstone.com. […]
Global manufacturing was lackluster in November according to the Global Manufacturing PMI produced by JP Morgan and Markit Economics. The headline index registered 51.2, barely changed from 51.3 in October. Commenting on the survey, David Hensley, Director of Global Economic Coordination at JP Morgan, said: “The global manufacturing PMI survey registered a second consecutive improvement […]
The Institute of Supply Management released their November report on December 1st 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 positive […]
New orders for durable goods in October rose by 3.4 percent month on month to $239.976 billion. This result was better than analyst’s expectations, largely as a result of a surge in the transportation component where non-defense aircraft increased by 81 percent. Motor vehicle and parts orders fell 2.9 percent after rising 1.0 percent in […]
The Precision Metalforming Association (PMA) released its November 2015 Business Conditions Report this week. The survey of 111 PMA members in the U.S. and Canada indicates that manufacturers are expecting steady economic conditions during the next three months. Incoming orders are expected to remain at the current rate with 32 percent forecasting an increase in […]
The Chicago Business Barometer, or Chicago PMI as it is commonly called, fell 7.5 points in November to 48.7. A decline in new orders put the Index back into contraction for its sixth time this year. The index, an indicator of business demand in the Chicago area, has been volatile throughout 2015 giving less credence […]
We have two data sources for this report. These are the Federal Reserve and the Oanda forex trading platform. An explanation of these sources is given at the end of this report. Oanda is current every day but the Federal Reserve Daily Broad Index (BI) is normally about eight days in arrears. As of November […]