Economy

December 2016 at a Glance

Written by John Packard


The last month of the year was a strong one based on the data we just reviewed and have shared with you in the table at the end of this article.

SMU Price Momentum Index finished both the month and the year pointing toward higher prices in the coming 30 to 60 days.

Our Sentiment Index also finished strong for the month and both single data points and our three month moving average are trending higher.

Flat rolled prices have been moving higher in each of the past three months. Our $594 per ton average for the month of December was the same as Platts and slightly higher than the $586 per ton number that the CME Group settled HRC futures on.

Many of the steel inputs such as iron ore and scrap were higher in December than the prior months. This included zinc which averaged almost $0.05 per pound more than what we saw for the month of November. Iron ore averaged $79.9/dmt for the month and all of the scrap items saw increases of at least $40 per gross ton.

Rig counts (energy markets) rose and averaged 643 rigs which is 60 rigs better than November and 100 rigs better than October.

Inventories remained tight at the domestic steel service centers with MSCI reporting flat rolled at 2.2 month’s supply and SMU reporting our Apparent Excess as only being 1,000 tons. The lower inventories will keep pressure on the mills to increase prices.

Latest in Economy

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.