SMU Data and Models
Strong Distributor Shipments, Receipts Keep Inventories Balanced
Written by John Packard
November 21, 2017
Flat rolled steel inventories ended the month of October in a balanced situation based on the Steel Market Update Apparent Excess/Deficit proprietary model, which is applied to the MSCI inventories and shipment data.
U.S. steel service centers ended the month of September with +68,000 tons of excess inventories, based on the SMU model.
Our forecast called for flat rolled steel distributors to ship 2,205,000 tons of sheet and coil products during the month of October. We also forecast inventories to be at 4,914,000 tons, which if correct would have resulted in the service centers carrying an apparent excess of +147,000 tons.
According to the Metals Service Center Institute (MSCI), October shipments of flat rolled were 2,301,000 tons or almost 100,000 tons better than our forecast.
Our forecast called for receipts to fall in October from the 101,185 tons per day received in September to 100,210 tons per day in October. In actuality, receipts rose to 104,600 tons per day in October.
Inventories of carbon flat rolled came in at 4,847,000 tons or 64,000 fewer tons than forecast.
Service centers are -19,000 tons from having their inventories perfectly balanced.
November Forecast
Steel Market Update believes shipments of flat rolled products will total 2,097,000 tons for the month of November.
We believe inventories of carbon flat rolled will total 4,700,000 tons at the end of the month.
Our forecast calls for the service centers to hold +126,000 tons of excess inventories at the end of the month.
John Packard
Read more from John PackardLatest in SMU Data and Models
SMU’s December at a glance
SMU’s Monthly Review provides a summary of important steel market metrics for the previous month. Our latest report includes data updated through December 31st.
SMU Survey: Steel Buyers’ Sentiment Indices contrast at year end
Both of our Sentiment Indices remain in positive territory and indicate that steel buyers are optimistic about the success of their businesses.
SMU Survey: Mill lead times contract slightly, remain short
Steel mill production times have seen very little change since September, according to buyers participating in our latest market survey.
SMU Survey: Buyers report mills are slightly less flexible on pricing
Steel buyers of sheet and plate products say mills are still willing to bend on spot pricing this week, though not quite as much as they were two weeks prior, according to our most recent survey data.
December energy market update
Trends in energy prices and active rig counts are leading demand indicators for oil country tubular goods (OCTG), line pipe and other steel products