Last Week’s Disappointments Reinforce SMU Lower Price Momentum

SMU was disappointed in two key data sets which were released this past week. The first was the MSCI service center shipment and inventories which indicated a weakening economy and a continuation of the high inventory levels at the U.S. distributors. The second was the import license data through the first 15 days of October which indicated continued strong steel imports with the trend suggesting October imports could exceed 3.5 million net tons. Both are bearish for flat rolled steel prices moving forward.

In a report to our Premium level members, Steel Market Update calculated service center flat rolled steel inventory excess as having increased by 200,000 tons above August levels during the month of September. September shipments were 9.7 percent less than one year ago and they were 3,000 tons per day fewer than August 2015.