Economy
ISM Steel Buyers Optimistic About Future Trends
Written by Sandy Williams
August 5, 2014
Steel buyers in the July ISM Steel Buyers Survey are expecting increased orders for the next three months. The percentage of buyers who expect an improvement in orders increased from 33.3 percent to 50 percent in July with the remaining 50 percent expecting order levels to remain the same.
Forty percent of buyers still say operating levels are below optimum efficiency levels, but the number who reported them as above increased from 8.3 percent to 20 percent in July.
Tons on hand would cover current shipping levels for 0-1 month said 30 percent of buyers, 1-2 months said 50 percent, and 2-3 months said 20 percent of buyers. Compared to 12 months ago, tons on hand are perceived as the same for 60 percent of buyers and 10 percent higher by the other 40 percent surveyed. Current shipping levels are above those of 12 months ago said 60 percent of buyers.
Inventory levels compared to demand were considered too high by 40 percent and just right by 60 percent. Those 40 percent say they will attempt to decrease inventory over the next six months. Selling prices are viewed as competitive by 60 percent of buyers but 30 percent see them as weak or very weak, an increase from 16.6 percent in June.
More buyers in July were optimistic about the trend of general economic activity for the next six months, increasing from 25 percent to 40 percent. The optimism continued for the trend for sales and production in the industry with 50 percent of buyers expecting higher sales and production, an increase from 25 percent in June.
At present production rates and with no new orders, current order books are expected to last 1-2 months for 44.4 percent of buyers, 2-4 months for 22.2 percent and more than six months for 33.3 of buyers. In June only 16.7 percent had order books more than six months out. Backlogs are expected to increase in the next three months said 50 percent of buyers, up from 25 percent in June.
No one in the survey reported workforce on short time or layoff and 50 percent expect to hire new people. Seventy percent of buyers surveyed still have no plans to build or buy new manufacturing facilities in the next year.
In regards to foreign steel, 44.9 percent said foreign mill prices were below or well below domestic prices. Foreign mills are still working hard to capture U.S. business. Compared to past practice, dependence on off shore sources for the next 6 months is expected to be greater for 42.9 percent of buyers (up from 33.3 percent in June) and the same for 57.1 percent.
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).