ISM Steel Buyers Optimistic on Orders and Economy

Steel buyers are continuing to keep inventories lean.  Most (47.1 percent) said they have enough steel on hand to cover current shipping levels for 1-2 months while 35.3 percent said they have tons on hand to cover 0-1 month—a rise of 2 percent since July. Compared to 12 months ago, 52.9 percent say they have similar levels of tonnage on hand and 29.4 say they have more. 

Inventories are a closer fit to demand with 64.7 percent reporting a good match and 35.3 percent saying inventory levels are still too high. Slightly more than half of respondents said they will maintain their inventory levels over the next six months while 35.3 percent plan to decrease levels. 

Shipping levels compared to three months ago have risen for some (41.2 percent compared to 33.3 percent last month) and are generally above levels of 12 months ago. 

Current receipts compared to current shipments slipped slightly with 82.4 percent reporting the same but 11.8 percent reporting below, compared to 0 percent reporting below last month.  Most expect receipts to stay the same over the next three months but 23.5 percent (up from 16.7 percent in July) expect receipts to be less.

Backlogs are expected to increase some over the next three months. 

Prices were rated as competitive by 82.4 percent of respondents—a substantial increase from 55.6 percent last month. Buyers who perceive foreign mill pricing as higher than domestic, increased by 12 percent in August to 17.6 percent, while 58.8 percent said they were not significantly different and 23.5 percent perceived foreign prices as lower. 

No survey respondents reported any workforce on short time or layoff in August. Most (64.7 percent) have no plans to buy or build new facilities within the next year; plans to hire new employees increased by 8.2 percent to 47.1 percent in August.