Steel Mills
July 19, 2015
Service Center Flat Rolled Shipments in a Rut & Inventories are Too High
Written by Peter Wright
There seems to be more inaccurate analysis published on this subject than on any other that we track at Steel Market Update. For example on Saturday AMM reported that, “US steel service center shipments improved in June compared with the previous month ——-.” At a superficial level this statement is correct, but as an analysis of the actual direction of this sector of the market, we believe it is quite wrong. The problem is that service center shipments vary from somewhat seasonal to extremely seasonal during the course of a year and the number of shipping days in a month varies from 19 to 23. In our SMU analysis we report each month on the seasonality issue and prefer to draw our conclusions from a tons per day comparison with previous months in preference to a tons per month comparison. In reality tons per month did increase in June as AMM reported but tons per day decreased. The tons per day angle was absent from the AMM report.
Here is our take on the June data from the MSCI.
Total service center carbon steel shipments increased by 277,400 tons in June to 3.404 million tons. Shipping days at 22, were two more than May. On a tons per day basis (t/d) shipments decreased from 156,300 in May to 154,700 in June.
