SMU Service Center Apparent Excess Inventories Forecast to Balloon

Last month, Steel Market Update forecast carbon flat rolled shipments out of the U.S. steel service centers would total 2,100,000 tons. Earlier this week the Metal Service Center Institute (MSCI) reported distributors shipped 2,051,600 tons. We over-forecast shipments by 48,400 tons. Our forecast was based on shipments being 4.0 percent higher than November 2013 and instead they came in at 2.4 percent better than last year.

When it came to inventories we forecast excess inventories at 408,000 tons and the service centers would be holding 5,414,000 tons of flat rolled on their floors at the end of November. Based on our proprietary formula, the excess inventories totaled 536,000 tons and distributors held 5,531,000 tons on their floors.