Key Steel Market Indicators on June 30th 2014

An explanation of the Key Indicators concept is given at the end of this piece for those readers who are unfamiliar with it. We have made two changes this month to try to make this even more representative of the market. Both the long and flat products shipment rows have been changed from “shipments” to “supply” which includes imports because we believe this is a more valuable data point when it comes to evaluating the overall market.

The total number of indicators considered at present is thirty five, the Chicago Fed Mid-West Manufacturing Index is still on hold to enable the staff to complete a major re-vamp of the structure of their report. Please refer to Table 1 for the view of the present situation and the quantitative measure of trends. Eleven of the present situation indicators based on historical standards were positive on June 29th and eight were negative with sixteen considered to be close to the historical norm. Five of the eight negative indicators were in the steel long products and construction sectors. It makes sense that these two groups would be in harmony. This broad look confirms that it is construction that is holding steel demand lower than is normal at this time in a cyclical recovery. The present situation improved significantly from our last publication on May 29th when twelve indicators were negative, thirteen positive and ten neutral. This was a net change of – 4 to the indicators classified as poor by historical standards and a net change of -2 to the indicators considered historically good.