SMU Data and Models
SMU Service Center Inventories Rise to 2.7 Months of Supply
Written by John Packard
April 14, 2019
Flat rolled steel inventories at the service centers rose at the end of March, according to the data providers working with Steel Market Update.
SMU has been collecting service center data for almost two years now. Six months back, with the help of the CRU team, we changed the way we were collecting and the information we were collecting to make it more valuable for our data providers and ultimately for the industry. We have been adding new service centers who provide flat rolled and plate steels to the manufacturers and fabricators. We would like to add even more distributors. If you would like to find out more about what it means to be a data provider and how to begin, please contact John Packard at John@SteelMarketUpdate.com or Estelle Tran at Estelle.Tran@crugroup.com.
As mentioned above, we collect data on flat rolled (sheet and coil) as well as plate steels. Today we are going to provide data regarding flat rolled inventories through the end of March 2019. The full report, which includes flat rolled and plate analysis as well as the “Flash” report we provide at the end of the first week of data collection, are currently only available to data providers.
Overview
Service centers’ supply of flat roll rose with the number of months of supply, up 0.2 months of supply. From SMU’s perspective, inventories are balanced to the high side and do not support any near-term buying surge. This should help moderate steel prices over the next 30 days.
Flat Roll inventories Rise to 2.7 Months
U.S. service center flat roll inventories continued to build in March, coinciding with the downward pressure on pricing, the latest Steel Market Update Inventory Survey found.
Service centers carried 2.7 months of sheet supply at the end of March, compared to 2.5 months at the end of February. Total shipments of sheet decreased month on month, even with one more shipping day, making 21 in March.
Shipping days of supply swelled to 57.2 in March, up from 50.6. The higher inventory levels are evidence as to why mills have struggled to keep HRC prices above $700 per net ton.
The tons on order edged down in March, which affirms what we’ve been hearing about buyers carefully managing their inventories because of worries that prices could fall further. The percentage of inventory on order slid down to 64 percent in March from 68 percent in February. When considered along with the steady but unremarkable shipment levels seen, the supply on order represents 36.8 days of supply, compared to 34.2 in February.
The percentage of service centers’ inventory committed to contracts increased to 55 percent in March from 47 percent in February.
John Packard
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