EUROFER, the European Steel Association, says high levels of steel imports into the European market are “distorting traditional steel trade flows.” Steel imports into the European Union (EU) rose by more than 14 percent. EU steel use grew hesitantly in the second half of 2014, rising just 3.3 percent in 2014. “Weak business conditions in […]
Earlier this week Steel Market Update suggested that perhaps we are getting close to that time when it is necessary to have a dialogue/debate as to when and at what level will flat rolled steel prices bottom. As of Tuesday of this week, Steel Market Update range for benchmark hot rolled coil was $520 to […]
Licensed data for January was updated on February 3rd through the Steel Import Monitoring System of the US Commerce Department. The SMU publishes several import reports ranging from this very early look using licensed data to the very detailed analysis of final volumes by district of entry and source nation which is published in our […]
Even the Cliffs Natural Resources CEO weighed in on the food of foreign steel imports and what the domestic steel industry should do to protect their markets. Lourenco Goncalves is never at a loss for words and his comments made during Cliffs quarterly earnings conference call was no exception. First, the results posted by the […]
The Institute of Supply Management released their January report on February 2nd. An explanation of this data set is given at the end of this piece. After the October surprise on the upside, the index slid back once again from 55.1 in December to 53.5 in January. The three month moving average has declined for […]
SMU Price Momentum Indicator has been stuck pointing lower for a number of months, ended the month of January as it did at the end of November and December. We saw SMU Steel Buyers Sentiment Index improve by +1 point in January over the month of December. However, when looking at Sentiment based on a […]
According to The TEX Report, Japan will decrease its shipment of hot rolled coil to South Korea beginning in February. Orders from South Korea for February shipments of HRC have dropped, in some cases by nearly half, due to weakened demand for OCTG in the U.S. Last year Japan exported 2,045,000 tonnes (2,254,188 net tons) […]
Barge activity on the lower Mississippi remains strong. Winter weather has hindered freight movement in a few northern regions and barge availability is tight in some areas, according to the latest MID-SHIP Report. Northbound barges are showing strong steel and salt cargoes. Stevedores have been working vessels as they arrive in New Orleans and elsewhere […]
Steel Market Update thought it might be worthwhile to pick out some of the comments made by Steel Dynamics CEO Mark Millett during his earnings conference call with analysts late last week. We have focused on comments made about foreign steel, scrap, energy markets and the new Columbus facility. Each of the comments made are […]
The Bureau of Economic Analysis (BEA) released the first estimate of Q4 2014 Annual Revision of the National Income and Product Accounts on Friday. The annualized growth rate in the 4th Q disappointed economic pundits by coming in at 2.64 percent after increasing by almost 5.0 percent in Q3. GDP is measured and reported in […]
An explanation of the Key Indicators concept is given at the end of this piece for those readers who are unfamiliar with it. The total number of indicators considered in this analysis is currently 36. Please refer to Table 1 for the view of the present situation and the quantitative measure of trends. Readers should […]
As we listen to the domestic steel mills earnings conference calls, one of the items we focus on is their viewpoint regarding service center inventories. One year ago the domestic mills were touting the lack of inventory as being one of the drivers of orders which was keeping flat rolled steel prices high. That tune […]
Steel Dynamics reported a record setting year and fourth quarter 2014. Steel shipments for the quarter were up 51 percent to 2.3 million tons from 1.5 million tons in Q3 2013. Steel fabrication had operating income of $22 million following a loss of $122,000 a year ago. For the full-year 2014 steel shipments totaled 7.4 […]
The spread between world hot rolled export pricing and that of the domestic average here in the United States is shrinking based on our analysis of steel pricing data from this week. As the spread shrinks, the competitiveness of imported steel into the United States is reduced. Over time, if the trend continues, the domestic […]
The fall in hot rolled futures prices seems to have slowed with the CRU down only $6/ton this week compared to an $18/ton drop the week prior. The second half of the year seems to have stabilized with trades being done at $570-575/ton for Q3 and Q4. The near term remains softer with bids retreating […]
Steel imports continue to flood U.S. shores and were a priority issue for CEOs during earnings calls this month. Low cost imports are creating competition for market share as well as depressing prices in the carbon steel spot market. Nucor CEO John Ferriola summed up the current market condition: “The other major headwind is from […]
Chinese steel trade data was recently released for the month of December 2014, providing updated data on iron ore imports, steel scrap imports, and flat rolled imports and exports. Chinese imports of iron ore in December were 86,850,000 metric tons, an increase of 28.9 percent from the previous month and an increase of 18.4 percent […]
Turmoil continues in the global currency markets as the European Central Bank announced a quantitative easing program last week, S&P downgraded Russian debt to junk status yesterday, the Greek national election on Sunday will result in a strong resistance to EU mandated austerity programs and the Swiss removed the currency cap vs the Euro last […]
The following is the Chicago Federal Reserve statement followed by our own graphical analysis. The CFNAI is an excellent reality check for much of the economic analysis that we routinely provide in The Steel Market Update. An explanation of the Index is provided at the end of this piece. Index shows economic growth slowed in […]
AK Steel and Nucor spend time on their earnings conference calls earlier today to point out the negative impact imports were having on their business and steel pricing. James Wainscott talked about imports during his opening statements, “Between 2013 and 2014 flat-rolled finished carbon steel imports rose by some 60%. For the year, we saw […]
AK Steel CEO, James Wainscott, spoke to analysts this morning regarding AK Steel 4th Quarter and calendar year 2014 earnings. We have a separate article which speaks to their earnings. What we have done is to point on some of the highlights of the call from our perspective: AK Steel did a major reline of […]
Nucor Corp. reported net earnings of $210.4 million for the fourth quarter of 2014, compared to $245.4 million in the third quarter of 2014 and $170.5 million in the fourth quarter of 2013. The drop was expected due to typical seasonality in the fourth quarter and downward pressure on the industry from steel imports. Net […]
AK Steel claimed its best quarter in three and a half years and its best annual performance since 2008. AK Steel reported shipments of 2,010,200 tons in fourth quarter 2014 compared to 1.42 million tons in Q4 2013. The increase exceeded analyst expectations and was due primarily to strong demand from automotive and the addition […]
US Steel earnings reported 2014 net income of $102 million, attributing its Carnegie Way for its first profitable year since 2008. In 2013, US Steel reported a full-year net loss $1.645 billion that included $1.5 billion in impairment and restructuring costs. Net income for fourth quarter was $275 million, compared to $297 million in Q4 […]
In another article in tonight’s newsletter we report on the production statistics based on AISI data. Essentially, production is up a couple of percent while at the same time, in another article, we report on foreign steel imports which are up 38 percent. I don’t know if the domestic steel mills will file dumping suits […]
The following article on the futures markets was written by Andre Marshall, CEO of Crunch Risk, LLC. Financial Markets: The S&P continues to perform, we are last 2054 on the March futures after testing our recent low at 1981 on the 16th. It looks like we are headed back to take out the highs at […]
The three T’s, taxes, trade and transportation, are top issues the American Iron and Steel Institute (AISI) hoped would be addressed by President Obama in the State of the Union address earlier this week. AISI president and CEO Thomas Gibson expressed disappointment in the President’s address which had some “positive elements for the manufacturing sector” […]
US Steel told employees it will idle operations in Illinois and Indiana, laying off 545 workers. The newest cuts follow the layoff of 756 workers at its tubular plants in Ohio and Texas earlier this month due to decreased demand from oil prices and the surge in lower cost imports. Two coke ovens at Granite […]
Benchmark hot rolled coil prices dropped again this week as buyers struggled with an oversupplied HRC market due to high service center inventories, a continuation of high foreign imports and the collapse of the OCTG and line pipe markets due to weak oil prices. Couple those three items with more domestic supply than necessary for […]
A lot has already been written about the dramatic decline in oil prices, the persistent high imports of energy tubulars, and related issues. What is missing, in my opinion, is some perspective and context to pull it all together. The purpose of this article is to show why the energy sector is so important to […]