Total housing starts declined from 1,071,000 in April to 1,001,000 in May but the three month moving average (3MMA) increased from 983,000 in April to 1,007,000 in May. It looks as though April was a bounce back from the severe winter delays and that May reverted to trend. Figure 1 shows total housing starts from […]
Steel Dynamics Inc. (SDI) expects higher profits in second quarter compared to first quarter 2014. In its Second Quarter Earnings Guidance, SDI said steel shipments and metal spreads are improving despite increased import activity. SDI anticipates demand from automotive, manufacturing and construction will continue to trend upward. Residential construction has rebounded with the return of […]
Industry and economic data is always subject to inaccuracies so we at SMU try to compare different data sources to get the best handle on a situation. Housing and non-residential construction starts are examples that come to mind. In the case of steel imports we have three reports produced by the US Department of Commerce: […]
“Following the doubling of steel production from 849 million tonnes in 2000 to 1.6 million tonnes in 2014, we are likely entering a period of consolidation, or at the very least, much reduced growth.” That is the opinion of Becky Hites, analyst and president of Steel-Insights, LLC in a June 7, 2014 report, Fixed Asset […]
As you could probably sense from our last issue of Steel Market Update, we are concerned about the amount of foreign steel imports related to the strength of the overall economy. It is one thing to see imports surging when the economy is hot and steel usage is high like we saw in 2004, 2006 […]
Truckload capacity is tight but trucks are still available according to logistics resource DAT Solutions. The potential port strike on the West Coast, however, and the addition of agricultural shipping may push the situation to a tipping point says DAT. Flatbed demand is high across the country except in North Dakota where it is mostly […]
We included this article in tonight’s issue because we saw evidence of confusion between the defunct Warren Steel of RG Steel fame and that of Warren Steel Holdings which is a long products mill also located in Ohio. Long products producer Warren Steel Holdings, LLC (not to be confused with the former Warren flat rolled […]
A short note to let our Premium Level members know that our Steel Market Update survey results are online and can be accessed on the website. If you need assistance accessing any of the Premium products on our website please let me or Brett@SteelMarketUpdate.com know and we will help you. We are also sharing this […]
The Bureau of Labor Statistics (BLS) report on non-farm employment indicated that 217,000 jobs were added in May, April was revised down by 6,000 to 282,000 and March was unchanged. The three month moving average (3MMA) rose from 190,000 in March to 236,000 in April then declined by 2,000 in May, (Figure 1). All numbers […]
The housing bubble in China has popped according to economists. The oversupply of housing and shortage of developer financing will slow China’s GDP growth to less than 6 percent in 2014 says a recent report by Japanese investment company Nomura. Nomura says a “hard landing” may be in China’s future due to a 33 percent […]
Steel Market Update (SMU) Steel Buyers Sentiment Index is at +54 this week and continues to be well within the optimistic range for the index. Even though the index dropped 8 points from the all-time high recorded during the middle of May, the growing optimistic trend continues as our three month moving average improved to […]
Steel Market Update (SMU) Steel Buyers Sentiment Index is at +54 this week and continues to be well within the optimistic range for the index. Even though the index dropped 8 points from the all-time high recorded during the middle of May, the growing optimistic trend continues as our three month moving average improved to […]
The steel storage facilities located at ports around the United States are brimming with foreign steel. We have been advised that companies like Kinder Morgan and Fleetwood Port Services are at maximum capacity in their Houston facilities and struggling with Savannah, Camden and other port facilities. However, that is not the major problem facing the […]
The auto sale roundup for May started out with gusto. Early reporter Chrysler posted US automotive sales at 194,421 units, a 17 percent increase year over year. Chrysler’s Jeep brand set a sales record in May with 64 percent jump in sales. On CNBC this morning, they were reporting Chrysler as saying their forecast was […]
An explanation of the Key Indicators concept is given at the end of this piece for those readers who are unfamiliar with it. The total number of indicators considered at present is thirty five, the Chicago Fed Mid-West Manufacturing Index is still on hold to enable the staff to complete a major re-vamp of the […]
Each month the Commerce Department issues its construction put in place (CPIP) data on the first working day covering activity two months earlier. April data was released on June 2nd. Total Construction: Data is reported on both a seasonally adjusted and non-adjusted basis. In the SMU analysis we consider only the non-adjusted data and remove […]
Steel Market Update has been following the Armada Corporate Intelligence economists since we first heard Dr. Chris Kuehl present at a conference we attended earlier this year. We were so impressed with both Dr. Kuehl’s (pronounced Keel) presentation skills and their newsletter that we invited Dr. Kuehl to be a keynote speaker at this year’s […]
For those of you who are paying attention to our website you might have noticed we added a new sub-menu under the Resources tab. The new menu is called “The Truth About Selling Steel” and we have attempted to split out those articles associated with sales from our Steel Buyers Basics series of articles many […]
As usual we will spend a few moments taking a look at the month of May in our rear view mirror to see what transpired. SMU Price Momentum Indicator was adjusted during the month from Higher to Neutral as we detected a change in the supply/demand dynamics with the return to full production at US […]
Steel imports to the U.S. totaled 3.7 million net tons according to preliminary data from the US Census Bureau but the reaction to this data depends on one’s point of view. The American Institute for International Steel (AIIS) and the American Iron and Steel Institute (AISI) both came out with reports on April imports, but […]
After a weak start to 2014 business activity is going strong in May said participants on the HARDI monthly galvanized steel call. Steel Market Update (SMU) joined HARDI wholesalers who supply galvanized steel to the construction trades to talk about concerns in the industry including domestic mill price trends as well as the impact of […]
The Keystone XL project continues to be beset by delays as court disputes in Nebraska prolong presidential approval. A decision by the administration was put off “indefinitely” in April and now is likely to be delayed until after November elections. TransCanada President Russ Girling recently stressed the company is not giving up on the pipeline […]
Welcome back to those who have returned to your offices for the next big summer push. I spent a portion of my day today trying to get a sense of how business conditions are for those with whom I was speaking. With the exception of one service center located on the East Coast who told […]
Demand is continuing to improve according to participants in our Steel Market Update (SMU) mid-May Steel Market Survey. Just over half of our respondents, 50.49 percent, said steel demand is improving, up from 47 percent in mid-April and less than one quarter in mid-March. This month we polled a group consisting mainly of manufacturing companies […]
The Architecture Billings Index remains in negative territory again this month. The ABI, which reflects the nine to twelve month lead time between architecture billings and construction spending, was at 49.6 in April, up slightly from 48.8 last month. A reading below 50 indicates contraction and a reading above 50 indicates an increase in design […]
NLMK announced improved sales for the Group and NLMK USA in its Q1 2014 US GAAP results. The Group’s steelmaking capacity utilization ran at 92 percent through first quarter with steel sales up 8 percent quarter over quarter to 3.866 million tons. Crude steel production dropped 4 percent quarter over quarter due to seasonal factors […]
Total service center carbon steel shipments in April rose by 125,500 tons to 3.640 million tons, the highest monthly tonnage since March two years ago. Shipping days in April were unchanged from March at 21. Tons per day (t/d) shipments rose from 167,400 March to 173,300 in April, both on a non-seasonally adjusted basis. Intake […]
Every month, Steel Market Update calculates whether flat rolled steel distributor’s inventories are in excess or a deficit based on our proprietary formula. The Metal Service Center Institute released April data late last week and, based on our analysis, we believe the “apparent deficit” to be 251,000 tons. This represents an improvement of 101,000 tons […]
The housing market is struggling. Even though the steel content of housing is only a small proportion of total steel consumption, housing is a leading indicator of many construction sectors, such as non-residential and sub sectors of infrastructure, and has a large multiplier effect in the economy as a whole. Existing home sales dipped again […]
Residential building permit authorizations and housing starts surged in April after a weak showing during the winter months. Housing starts in April increased 13.2 percent from March to a seasonally adjusted annual rate of 1,072,000 and jumped 26.4 percent from the April 2013 rate, according to data released by the Department of Housing and Urban […]