SMU Analysis: Industry Inventory at a Healthy Level

Steel inventories are increasing as the inventory-to-shipment ratio is decreasing—a very healthy trend for the supply chain. To efficiently manage inventory, companies generally want to keep the ratio low. A rise in the inventory-to-shipment ratio indicates that shipments are falling or the operation is keeping too much inventory on hand.

Each month, the Census Bureau reports on manufacturing shipments and inventories with a subsection titled “Iron and Steel Mills and Ferroalloy and Steel Products Manufacturing: Total Shipments and Inventories: Millions of Dollars: Seasonally Adjusted.” For the first time, Steel Market Update has extracted and analyzed this data to provide a benchmark for subscribers to compare to their own business results. We will also use this as a reality check of Metals Service Center Institute inventory and shipment data.