Service Centers Dramatically Reduce Apparent Inventory Excess & Our New Forecast

U.S. flat rolled steel service centers were able to reduce their excess inventories by 222,000 tons, according to our proprietary analysis of the MSCI data released earlier this month. Our Apparent Excess/Deficit model has the distributors carrying a 46,000 ton excess as of the end of April. This is the first time we have seen inventories close to “balanced” or a slight deficit since August 2014 when the distributors were carrying a deficit of 9,000 tons. Our expectation is for the service center carbon flat rolled inventories to continue to drop pushing into a deficit as early as the end of this month (May).

So, how did we do with our forecast for April?