Service Center Flat Rolled Inventories Now in a Deficit

Flat rolled steel inventories being held by U.S. steel service centers have moved from an Apparent Excess to a Deficit based on our analysis of the recently released data by the Metal Service Center institute (MSCI). We have been reporting on the reduction of the Apparent Excessive inventories being held at flat rolled steel distributors for some time now. As inventories declined and moved into a Deficit based on our model, this has help move distributors from a hold mode in buying to a much more active mode. As lead times expanded the need to buy increased which resulted in the tight negotiating positions taken by the domestic steel mills.

We see inventories moving back into an excess situation in September (minor excess) but we are not seeing a dramatic increase in inventories through the five month time period discussed in this article.