“Today I am going to be Chicken Little” is how John Anton of IHS Global Insight began his presentation at their 7th annual Pricing & Purchasing Summit. The reason behind his comment was his forecast for 2014 called for a modest rise in steel prices in early 2014 before flattening out. The Chicken Little part […]
The Conference Board composite measure of consumer confidence decreased in September from 81.8 in August to 79.7. The 3MMA fell from 81.6 to 80.8 but was up by 15.8 year over year. The view of the present situation and expectations moved in opposite directions. The consumer’s view of the present situation was up from 71.1 […]
Manufacturing activity in the Fifth District was stalled in September according to the Federal Reserve Bank of Richmond. The composite index of manufacturing activity registered 0 following last month’s reading of 14. New orders and shipments slowed compared to August. Lead times were unchanged at an index reading of 1 for the second month. Shipments […]
U.S. steel industry members are challenging proposed changes to Federal Highway Administration (FHWA) Buy America laws that will affect manufactured products, ferry boat equipment, and pig iron and processed, pelletized, and reduced iron ores. The FHWA sought comments from the public regarding the continued, need, in whole or part for the general waivers on […]
In August China’s steel production exceeded 50 percent of the global total for what we believe to be the first time. Global production in August was 130.352 million tonnes with a capacity utilization of 76.0 percent. In three months through August production was at an annual rate of 1.572 billion tonnes with a capacity utilization […]
TSI Iron Ore: Prices Wobble in Signs Market is Cooling… Iron ore prices have softened over the past couple of weeks, but are still holding the recent range above $130 per ton. Mixed news out of China regarding steel demand has cooled off buying for the time being as the market has failed to break […]
The Futures market has continued to be characterized by limit trading and a touch softer pricing. The lack of volatility in the physical market over the past few months has not given futures traders an impetus to put on (or close out) positions. Overall, the market has been quite boring with the expectations that better […]
Buyers looking to snag a low mortgage before rates rise too high pushed home re-sales to its highest pace since February 2007. Existing home sales rose 1.7 percent in August to a seasonally adjusted annual rate of 5.48 million from 5.39 million in July. The increase is likely to be temporary however, said Lawrence Yun, […]
Good news from the Philadelphia Federal Reserve Bank—manufacturing activity increased from 9.3 to 22.3 in September, its highest reading in the Business Outlook Survey since March 2011. Demand for manufactured goods increased 16 points on the new order index to 21.2. Shipments picked up from a decrease last month. Inventories and deliveries were steady […]
Increasing demand for design services fueling recovery for construction industry The Architecture Billings Index (ABI) showed more acceleration in the growth of design activity nationally. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. The American Institute of Architects […]
Housing starts in August fell short of economist expectations showing just a 0.9 percent increase to a seasonally adjusted annual rate of 891,000 units. The increase only comes after July’s rate was revised downward to 883,000 from 896,000, indicating the market may be flattening. Starts for single family homes rose 7 percent offsetting a […]
The Empire State Manufacturing Index lost two points in September but conditions for New York manufacturers still indicate modest growth at 6.3. New orders picked up from a flat 0.27 in August, rising to 2.4. The shipping index surged 15 points to 16.4—its highest level in more than a year. Prices paid held […]
Metalforming companies are predicting a decline in economic activity during the next three months after showing optimism in the August survey last month. The September 2013 Precision Metalforming Association (PMA) Business Conditions Report showed the number of participants forecasting a decline in activity doubled in September to 14 percent, with 51 percent expecting no change […]
Each month the Bureau of Labor Statistics puts out its series of producer price indexes, for thousands of goods and materials. The latest release on Friday reported August results. These statistics are a useful way to evaluate any changes in the competitive position of steel against competing materials. For the purpose of this report, Steel […]
Iron Ore The spot price is still $135/MT zone with the forward curve still in a healthy backwardation. Most expect Iron Ore to retrace, difference of opinion lies in whether it will see a big sell off or a modest one. The recent positive economic data out of China along with not terrible inventory levels […]
Financial Markets Two weeks back we were 1640 on SP 500 and technically it looked like we were headed to 1550-1560 zone as part of a larger retracement. Well the market has dumbfounded the chartists again, and we have since rebounded to today’s level of 1682. We are likely headed now to the 1770-80 zone […]
ISM Steel Buyers in August showed more optimism that orders will improve for the next three months. Buyers expecting an increase rose to 47.1 percent, up from 38.9 percent, while the percentage of buyers expecting business to remain the same rose to 41.2 percent from 33.3 percent last month. General economic activity over the next […]
Sooner Inc., the largest U.S. distributor of pipes for oil and gas, has been purchased by Tokyo-based Marubeni-Itochu Steel Inc. for $600 million in cash. MISI subsidiary Marubeni-Itochu Tubulars America, Inc., will gain a 100 percent of share of Sooner Inc. The two companies are both based in Houston. “We are pleased to complete […]
The Canada Border Services Agency (CBSA) is initiating an investigation into dumping of hot-rolled carbon steel plate and high-strength low-allow steel plate originating or exported from Brazil, Chinese Taipei, Denmark, Indonesia, Italy, Japan and the Republic of Korea. The investigation, announced on September 5, was prompted by complaints by Essar Steel, Sault Ste. Marie, […]
Job creation at 169,000 in August was a little below expectations but the downward revision to June and July of 74,000 was very disappointing. Employment gains continue to be heavily slanted towards service industries. In August production industries added, 18,000 jobs, service industries added 151,000 jobs, (Table 1). Included in the service number is government […]
TSI Iron Ore: Prices Stay Firm, Future Is Uncertain… After breaking through the psychological ceiling of $140/ ton a couple of weeks ago, the iron ore spot market has retreated ever so slightly to $137. While this is not necessarily an indication of a reversal in the pricing trend, it may shed light on […]
The Global PMI composite index increased to 51.7 for the month of August, up from the 50.8 reading in July. This slight yet meaningful increase marks the eighth consecutive month of expansion in the manufacturing sector. Manufacturing production increased for the tenth consecutive month, with the rate of growth at the highest level recorded since […]
The summer lull continued the past couple of weeks over the holiday weekend. Activity in the futures market has been limited with few trades going through. It seems that a confluence of factors has caused many traders to sit on the sidelines, the summer holiday season, directionless physical market and uncertainty in demand going into […]
The Institute for Supply Management Purchasing Managers Index (PMI) registered 55.4 percent in July which was an increase of 4.5 percentage points above the June reading of 50.9. The 3 month moving average (3MMA) rose from 50.2 to 51.43. Any reading above 50.0 percent means manufacturing is expanding. JP Morgan Global Manufacturing & Services PMI […]
Service Center Deficit Will Help Keep Mill Prices Firm Flat rolled inventories are at a 466,000 ton deficit according to Steel Market Update proprietary analysis of the recently released MSCI service center inventory data. The 466,000 ton deficit is the largest one we have measured since August 2009 when it was measured at 604,000 tons. […]
The number of open contracts (open interest) traded through the CME Group (NYMEX) during the month of August 2013 was 2,572 contracts (51,440 tons). This is lower than the 2,874 contracts (57,480 tons) traded in July and is 15.8 percent lower than the 3,055 contracts traded one year ago (61,100 tons). The news looks a […]
The key factor holding prices firm was the continuation of supply issues at the domestic steel mills. During the month we had ArcelorMittal Indiana Harbor lose their #3 blast furnace for a week. The furnace is back online as of the end of the month. We also had U.S. Steel performing maintenance on a furnace […]
Steel Market Update first attempt at a Monthly Newsletter was received very well. Our first issue went out at the beginning of August recapping the key events, prices and trends for the prior month (July). We have received a number of calls and emails wanting more information about how their company can subscribe to our […]
By the end of August SMU had adjusted our Price Momentum Indicator from Higher to Neutral, SMU Steel Buyers Sentiment Index averaged +40 which is higher than the average from June and July and well within the optimistic range of our Index. Benchmark hot rolled prices moved essentially sideways as the numbers show below. […]
The Chicago Business Barometer edged up 0.7 points in August, registering 53 from a reading of 52.3 in July, according to MNI Indicators. A gain in New Orders and Backlogs helped push the indicator upwards. The slight increase, however, indicates stabilization after an erratic second quarter. MNI reports the Barometer is still too close to […]