Economy
ISM Steel Buyers Expecting Fewer New Orders in Next 3 Months
Written by Sandy Williams
March 6, 2014
Steel buyers report a softening in new orders in the latest Institute for Supply Management (ISM) Steel Buyer’s Survey. Those who expect orders to increase over the next three months dropped to 27.3 from 42.9 percent in January, 18 percent expect orders to decline, and 54.5 percent expect levels to remain the same. Current incoming orders are less than needed for efficient operation according to 36.4 percent of steel buyers and at the right level for 45.5 percent.
Current tons on hand will cover less than one month for 36.4 percent of buyers, 1-2 months for 45.5 percent and 2-4 months for 18.2 percent. Tons on hand are the same or somewhat higher than levels from 12 months ago.
Inventory compared to demand is considered too high by 36.4 percent (up from 28.6 in January) and about right for 54.5 percent of those surveyed. Approximately 36 percent of those surveyed said they plan to reduce inventory over the next six months.
Current shipping levels are above those of three months ago according to 27.3 percent of buyers, up from 14.3 percent the previous month. Buyers are split evenly at 36.4 percent on whether shipping levels are higher or lower than 12 months ago.
At present production rates and with no new orders, current book orders would last 1-2 months for 54.5 percent of buyers. For the rest of the buyers surveyed, 18.2 percent said 2-4 months, 18.2 percent said 4-6 months, and 9.1 percent said 6 months or more.
Selling prices were viewed as competitive. Most (72.7 percent) expect backlogs to remain the same over the next 3 months, but 18.2 percent, up from 14.3 percent in January, expect a decrease in backlogs.
Looking at the six month outlook, economic activity is expected to remain the same said most steel buyers. The six month trend for buyers’ industry specific sales and production is expected to rise or remain the same.
Most expect dependence on off-shore sources to remain the same for the next six months. The discrepancy between foreign mill and domestic prices is weakening with just 36.4 percent of buyers reporting foreign prices below domestic levels, down from 57.2 percent in January.
Fewer buyers say their company plans to hire new people, 27.3 percent compared to 50 percent in January. Most have no plans to build or buy new manufacturing facilities within the next year.
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
Trump taps Lutnick to be Commerce Secretary
President-elect Donald Trump has named Wall Street veteran Howard Lutnick as the new US Secretary of Commerce.
New York state manufacturing activity ramps up to multi-year high
New York state’s manufacturing sector saw substantial recovery in November, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York.
CRU: Dollar and bond yields rise, metal prices fall as Trump wins election
Donald Trump has won the US presidential election. The Republican party has re-taken control of the Senate. Votes are still being counted in many tight congressional races. But based on results so far, the Republicans seem likely to maintain control of the House of Representatives. If confirmed, this will give Trump considerable scope to pass legislation pursuing his agenda. What this means for US policy is not immediately obvious. Trump will not be inaugurated until Jan. 20. In the coming weeks and months, he will begin to assemble his cabinet, which may give a clearer signal on his policy priorities and approaches. Based on statements he made during the presidential campaign, we have set out the likely direction of his economic policy here and green policy here.
ISM: Manufacturing index fell in Oct to lowest point of ’24
Domestic manufacturing contracted for the seventh straight month in October, according to the latest report from the Institute for Supply Management (ISM). This marks the 23rd time in the last 24 months that it has been in contraction.
Chicago Business Barometer slips in October
The Chicago Business Barometer fell to a five-month low in October and continues to indicate deteriorating business conditions, according to Market News International (MNI) and the Institute for Supply Management (ISM).