SMU Data and Models
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/159974453d96b2b4160573766f9f341c.jpg)
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.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/04/john-packard.png)
John Packard
Read more from John PackardLatest in SMU Data and Models
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/01/cropped-SMU_Mobile_final.png)
SMU’s August at a glance
SMU’s Monthly Review provides a summary of important steel market metrics for the previous month. Our August report includes data updated through August 30th.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Premium1.png)
SMU market survey results now available
SMU’s latest steel buyers market survey results are now available on our website to all premium members. After logging in at steelmarketupdate.com, visit the pricing and analysis tab and look under the “survey results” section for “latest survey results.”
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/01/cropped-SMU_Mobile_final.png)
SMU survey: Lead times edge higher for sheet
Current steel mill lead time averages are a few days longer than levels seen one month prior, but remain near historical lows for both sheet and plate products.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/01/cropped-SMU_Mobile_final.png)
SMU survey: Steel Buyers’ Sentiment Indices surge
Both our Current and Future Indices are now up to multi-month highs, indicating continued optimism among steel buyers.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/01/cropped-SMU_Mobile_final.png)
SMU survey: Mills’ flexibility on prices up slightly
Steel buyers found mills slightly more willing to negotiate spot prices this week, according to our most recent survey data. Though this negotiation rate has ticked up vs. our previous market check, overall rates have been trending downward since July’s highs.