SMU Data and Models
Service Center Flat Rolled Apparent Inventory Deficit Shrinks
Written by John Packard
July 19, 2017
After a careful analysis of the Metals Service Center Institute (MSCI) carbon flat rolled shipment and inventories data, and then applying that data to our proprietary Apparent Excess/Deficit inventories model, we have determined that distributor inventories improved during the month of June.
At the end of May, based on the MSCI data, SMU calculates that service centers had an 800,000-ton carbon flat rolled inventories deficit. Looking at the data just released for the month of June, the deficit continues, but it has dropped to -525,000 tons.
Looking at our original forecast for the month of June, we forecast shipments of 2,316,000 tons. We were very close as shipments came in at 2,300,000 tons.
At the same time, we forecast inventories of carbon flat rolled to be 4,652,000 tons at the end of June. Inventories, according to the MSCI, were 4,467,000 tons.
Our original forecast was for the Apparent Deficit to drop to -358,000 tons. We got the direction correct, but we were slightly too optimistic.
SMU Forecast for July 2017
We are continuing to use the same formula. Using a three-year average month-to-month change, our forecast calls for a continued drop in the Apparent Deficit. We anticipate that it will drop to -232,000 tons by the end of July. As you can see by the table below, we are forecasting shipments of 1,971,000 tons and end-of-July inventories to be 4,589,00 tons. We believe service centers will continue to grow their inventories through the end of the year.
John Packard
Read more from John PackardLatest in SMU Data and Models
SMU Survey: Current Buyers’ Sentiment Index jumps, Future Sentiment slips
SMU’s Current Buyers’ Sentiment Index rocketed up this week, while the Future Buyers’ Sentiment Index edged down. The two indices are almost at parity.
SMU Survey: Mill lead times stretch to 10-month highs
Buyers responding to our latest market survey reported that steel mill lead times were stretching out this week for sheet and plate products tracked by SMU. The results weren’t much of a surprise. Production times have begun moving out following a wave of frenzied buying in response to stricter Section 232 announced by the Trump […]
SMU Survey: Mills slam door on buyers looking to talk price
Mills’ flexibility on price for spot orders has taken a nosedive to levels not seen since the end of March 2023.
SMU Survey: Steel Buyers’ Sentiment indicates increased optimism
After reaching multi-month lows in mid-January, SMU’s Steel Buyers’ Sentiment Indices rebounded this week to some of the highest readings recorded in months.
SMU Survey: Mill lead times fluctuate, extensions expected
While we have seen some movements in recent weeks, steel mill production times remain within a few days of the historical lows observed over the last two years, a trend observed since mid-2024.