SMU Data and Models

Service Center Inventories: Apparent Deficit Grows to -377,000 Tons
Written by John Packard
March 22, 2017
Based on the most recent MSCI data, carbon flat rolled service centers in the United States shipped 2,103,000 tons of sheet products. Our SMU Service Center Apparent Excess/Deficit forecast had called for shipments to be 2,191,000 tons. So, we missed our forecast by 88,000 tons.
Our original forecast called for 4,551,000 tons of flat rolled inventories to be held at the distributors at the end of February. Our forecast was off by 63,000 tons with carbon flat rolled inventories totaling 4,614,000 tons.
Overall, SMU forecast the balance of inventories needed versus where MSCI was putting them at the end of the month was relatively close. SMU forecast the deficit of inventories would grow from -67,000 tons at the end of January to -433,000 tons. In actuality, based on the SMU model inventories are in a deficit situation only not quite as bad as we had imagined one month ago. The new Apparent Excess Inventories at the end of February 2017 is -377,000 tons.
New Forecast
We are going to continue with the same model we used in forecasting last month. To remind everyone we are using the average rate of change month by month seen over the past 4 years.
Our March forecast is for shipments out of the U.S. flat rolled steel service centers to reach 2,389,000 tons. At the same time, we believe inventories will remain constrained at and not grow but rather will come in at 4,448,000 tons. If this comes to fruition the Apparent Deficit would grow to -604,000 tons.
Our forecast actual calls for shipments to be 7.2 percent higher than last March and receipts to also be up at 7.5 percent over March 2016.

John Packard
Read more from John PackardLatest in SMU Data and Models

SMU Survey: Sheet lead times ease further, plate hits one-year high
Steel buyers responding to this week’s SMU market survey report a continued softening in sheet lead times. Meanwhile, plate lead times have moderately extended and are at a one-year high.

SMU Survey: Buyers report more price flexibility from mills
Nearly half of the steel buyers responding to this week’s SMU market survey say domestic mills are showing increased willingness to negotiate pricing on new spot orders. This marks a significant shift from the firmer stance mills held in prior weeks.

SMU Survey: Buyers’ Sentiment Indices fall
Current Sentiment Index dropped six points to +42 this week compared to two weeks earlier. It has fallen in every successive survey since reaching a 2025 high of +66 on Feb. 19.

March service center shipments and inventories report
Steel service center shipments and inventories report through March 2024.

Apparent steel supply contracts in February
The amount of finished steel that entered the US market in February receded from January’s peak, according to our analysis of Department of Commerce and American Iron and Steel Institute (AISI) data.