Final Thoughts
Final Thoughts
Written by John Packard
July 18, 2021
One of the products developed by Steel Market Update over the past four years is our flat rolled and plate steel service center inventories and shipment analysis. I discussed it briefly in Thursday’s newsletter, but I want to go into more detail as I believe it is a report that many of you will want to follow.
One of the reasons why I think our service center analysis is good is due to the variation of the data providers. We went out of our way to include small, medium and large-sized service centers and wholesalers. We have both public and private companies. This is critical to gathering data that is not skewed in one direction or another. We know from experience that large public companies tend to run tighter inventories than privately held companies. If you have too many public companies in your mix, the number of days of supply (or months of supply) can be misleading.
SMU has seen flat rolled inventories beginning to increase over the past two months. Our latest report was provided to data providers on Thursday (data providers also get a “Flash” report on the fifth working day of the month), and to our Premium level subscribers on Friday of this past week.
At the end of June, service centers held 47.6 days of supply, up from the final adjusted May level of 45.3 days. From the data, it seems inventories have risen from their low point in relation to outbound shipments.
We also track on-order volumes, which for flat rolled peaked in April and have edged down since. Service centers had 57.1 shipping days of supply on order in June. This is down from the 57.6 days held as of the end of May. The percentage of inventory on order slid to 120% in June from 127% in May.
As prices rise, we are seeing more inventory committed to contracts. In our estimation, service centers are limiting purchases of steel that is not pre-sold. As a result, the percentage of flat rolled inventory committed to contract has risen to 62% in June 2021. In June of last year that percentage was 51%.
If you are a service center or wholesaler in the United States who is inventorying flat rolled (HR, CR, GI, AZ) or plate steels, we invite you to become a confidential data provider. You can learn more about what is involved, our confidentiality agreement, and what you get in return by contacting Estelle.Tran@crugroup.com
If you are an Executive level member and you would like to upgrade to Premium (which gets you our detailed analysis of both flat rolled and plate steel inventories and shipments), please contact Paige@SteelMarketUpdate.com
On Aug. 2 and 3, Steel Market Update will host our next Steel Hedging 201: Advanced Strategies & Execution Workshop with our instructor Spencer Johnson of StoneX. This workshop is geared toward those who have a working knowledge of the futures markets and are interested in learning more about what strategies to use to manage your company’s specific price risk scenario. You can view videos and testimonials here: https://events.crugroup.com/steel101/steel-hedging-201-videos and you can learn more about the agenda, instructors, costs to attend, and how to register by clicking here. If you have any questions, please feel free to contact us at Events@SteelMarketUpdate.com
SMU Steel Summit Conference Update
We are past 800 and on our way to 900+ registered attendees for the 2021 SMU Steel Summit Conference. We expect to exceed 900 registered attendees within the next couple of weeks (if not sooner). We believe we will be close to 1,000 executives all-in by the time we get to the conference. I am hearing from companies that they are now making their minds up and deciding to travel to Atlanta to attend our conference. We want to host a safe conference, so we ask those of you planning on attending to please get vaccinated if you have not already done so. There is a listing of companies registered for this year’s event on the conference website, which you can access here. That list is updated twice per week.
We will open the SMU Steel Summit Conference platform on Aug. 2. The platform is available to both live and virtual attendees. The platform will contain a listing of all of the registered attendees (virtual and live), and you will be able to email attendees through the platform. The most up-to-date agenda will be there, speakers’ biographies, and much more.
The NexGen Leadership Award Nomination deadline has now passed (Friday was the last day). If you have a nominee that you failed to get into the system, please contact me by no later than Monday. I can be reached at John@SteelMarketUpdate.com
The Gateway area hotels next to the Georgia International Convention Center are sold out. However, if you need a room, I recommend you try contacting the hotels directly as we anticipate there will be some cancellations. Two hotels that are about 1-2 miles from the GICC are the Atlanta Airport Marriott Hotel and Atlanta Airport Westin Hotel, both on Best Road. When I last checked, they both had rooms available.
You can learn more about the 2021 SMU Steel Summit Conference by clicking here. You can register for either the live or virtual event by clicking here or going to this website: https://events.crugroup.com/smusteelsummit/register
On Aug. 11, we will dedicate one of our SMU Community Chat Webinars to go over the protocols for this year’s conference, how to use our platform if you did not attend last year’s virtual event (or need a refresher course), update on the agenda and speakers as we have made some last-minute changes, etc. We will advise when registration opens for that webinar, which will be right after we have completed our July 28 SMU Community Chat Webinar with Bernard Swiecki (who is one of our Steel Summit speakers as well). Mr. Swiecki is with the Center for Automotive Research (CAR) as their Director of Research. You can register for the July 28 Community Chat by clicking here.
As always, your business is truly appreciated by all of us here at Steel Market Update.
John Packard, President & CEO, John@SteelMarketUpdate.com
John Packard
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