2015 annual contract negotiations have begun, according to both manufacturers and service center steel buyers. The next month or two should be quite interesting as the process continues. Early reports are suggesting that the domestic steel mills may be more “flexible” in their flat rolled steel price negotiations than they were at this point in […]
The Bureau of Labor Statistics (BLS) report on non-farm employment indicated that 248,000 jobs were added in September. August , which had been disappointing, was revised up by 38,000 and July was revised up by 31,000. The three month moving average, (3MMA) declined to 224,000 in September and has declined for three straight months but […]
Each month the Commerce Department issues its Construction Put in Place (CPIP) data on the first working day covering activity two months earlier. August data was released on October 1st. Construction put in place is based on spending work as it occurs, estimated for a given month from a sample of projects. In effect the […]
Our Price Momentum Indicator has been stuck in “Neutral” since the last day of June 2014. We are now entering our 4th month and hot rolled steel prices have barely budged from the center line (OK, there have been some mild gyrations but no clear cut path up or down during the past three months). […]
The hot rolled futures market has been active this week. After weeks of very little movement, selling has pushed futures prices into a more dramatic backwardation. Nearby months such as November and December have fallen $7 to $632. Further down the curve, HRC prices have fallen slightly more with all months in 2015 falling $8 […]
Manufacturing activity grew for the 16th consecutive month but slowed to a PMI reading of 56.6 in September’s Manufacturing ISM Report on Business. While economists were expecting a smaller drop of 58.2 to 58.5 from last month’s reading of 59.0, U.S. manufacturing is still holding strong. “The September PMI registered 56.6 percent, a decrease of […]
Global manufacturing growth slowed in September. The JP Morgan Global Manufacturing PMI eased to a 4-month of 52.2 maintaining the general rate of expansion seen throughout 2014. Meaningful growth was mostly limited to the U.S., however, along with improvements in Czech Republic, Ireland, Taiwan and Canada. Growth was stagnant in most of the rest of […]
Steel Market Update spent the last two days canvassing end users and service centers to see where flat rolled steel prices are at the moment and where they might be heading from here. We heard from many service centers and end users that business conditions and demand for their products are doing quite well. We […]
The Canadian economy was flat in July following six months of gains according to data released by Statistics Canada on Sept. 30, 2014. GDP growth was unchanged, failing to meet economist forecasts of 0.2 to 0.3 percent growth. Manufacturing output grew by 1 percent. Durable goods rose 1.6 percent with notable increases in transportation equipment, […]
Schnitzer Steel Industries, Inc. expects significantly improved results for fourth quarter FY 2014, ending August 31, 2014. The company’s steel manufacturing business benefited from growing West Coast construction demand and productivity initiatives that resulted in operating income in the range of $13 to $14 per ton, the highest quarterly profit since FY 2008. Metals recycling […]
Armada Executive Intelligence released its monthly trends report that focuses on economic issues that are likely to have short and long term impact on business. The following is a summary of the important issues to watch in the coming months and year. Trend 1: U.S. Dollar Strengthening Banks around the world are taking their cue […]
Steel Market Update attended the groundbreaking ceremony for Big River Steel in Osceola, Arkansas which was held on Monday, September 22nd. According to Big River Steel Chairman and CEO John Correnti (and the sign at the entrance to the work site), the mill will be making steel in 550 days. A groundbreaking ceremony is much […]
Creditors of US Steel Canada are wondering how they are going to recover the money owed to them by the steel company. The Hamilton Spectator reports that US Steel Canada owes more than $94 million to contractors and suppliers, 190 of which are in the Hamilton area. The CCAA process prevents creditors from suing USS […]
Zinc prices hit a three year high in September at $2390/t, escalating quickly from the mid $1900s in March. Although the prices have moderated in the last few weeks zinc, as of September 18, zinc was at $2247/metric ton on the LME index. The soaring prices are due to production shortfalls and higher demand. The […]
“Let’s bring sexy back to steel!” That was the rallying cry of Associated Steel Distributors President Brian Robbins at the regional meeting held at the Ritz Carlton in Cleveland, Ohio on September 18. Robbins, CEO of MidWest Materials, harkened back to the days of steel glory when CEOs were celebrities of sort and even sales […]
Based on the results from our most recent Steel Market Update steel market analysis, flat rolled steel mill lead times, the number of weeks needed to produce and ship a new order, remained above 2013 levels on all products. SMU conducted one of our twice monthly steel market surveys this past week. During the process […]
Flat rolled steel mills continue to negotiate pricing on hot rolled, galvanized and Galvalume products and less enthusiastically on cold rolled, according to our latest flat rolled steel market analysis conducted this past week. Galvanized continued as the product manufacturing companies and service centers were reporting where prices were negotiable gathering 68 percent of the […]
Buyers and sellers of flat rolled steel are becoming more optimistic about their company’s ability to be successful based on current market conditions according to Steel Market Update and their Steel Buyers Sentiment Index. SMU Steel Buyers Sentiment Index rose to +64 or +11 points higher than where it was measured during the beginning of […]
Steel Market Update (SMU) conducted our mid-September flat rolled steel market analysis this week. We invited slightly more than 600 companies to participate in the latest survey which analyzes various trends which affect the flat rolled steel market. One set of questions had to do with the consolidation of the steel mills as SDI and […]
Steel Dynamics Inc. expects profits from third quarter steel operations to surpass second quarter and year over year results. In their third quarter guidance, SDI indicated earnings of $0.34 to $0.38 per diluted share that will include before tax charges of $34 million related to the acquisition and financing of Severstal Columbus. Shipments and metal […]
The Philadelphia Fed Manufacturing Business Outlook Survey registered a drop of 5.5 points to 22.5 in September after recording its highest reading since March 2011 at 28.0 in August. Orders and shipments increased by 1 and 5 points, respectively, while indexes for unfilled orders and delivery times were positive for the month. Input prices were […]
Esmark Industrial Group (EIG) announced the acquisition of Pittsburgh Annealing Box, Inc, for an undisclosed multi-million dollar purchase price. EIG is a metals and fabrication and manufacturing subsidiary of Esmark Inc. Pittsburgh Annealing Box, a maintenance, steel fabrication and repair operation, was founded in 1893 and has conducted business under the name KMA Manufacturing since 2003. […]
The steel market is scrambling to gather information as U.S. Steel Canada today announced they are initiating a court supervised restructuring of the Hamilton and Lake Erie steel mills (USS Canada) so that they can “compete in the North American steel market for the long term.” Metals and mining analysts told SMU this evening that […]
Industrial production (IP) and manufacturing capacity utilization for August 2014: Both of these data points are reported in the Federal Reserve G17 data base. The IP index was reported as 104.12 for August, a decline of 0.1 percent from July. This is another example where the individual month’s result can be misleading. The three month […]
Manufacturing activity in New York in September was at its highest level since late 2009. The general business conditions index rose 13 points to 27.5 according to the survey by the Federal Reserve Bank of New York. The new orders index rose three points to 16.9 while the shipments index advanced two points to 27.1—both […]
For those of you who are new to Steel Market Update (SMU) the Final Thoughts segment of the newsletter is reserved for me (John Packard, Founder and Publisher) to basically spout off on a wide variety of topics. This is the space I reserve for my opinions as well as in your face marketing (sorry, […]
General Electric is selling its GE Appliance business to AB Electrolux of Sweden for $3.3 billion. Electrolux, the parent company of US brands Electrolux and Frigadaire, expects the sale to generate annual cost synergies of approximately $300 million and enhance its position as a global player in home appliances. “The acquisition, which is our largest […]
After setting a record optimistic high of +68 at the beginning of August 2014, SMU Steel Buyers Sentiment Index has now declined for the second time and stands at +53. The most recent measurement is still well within the optimistic parameters for our index. Even so, we are concerned with the 15 point dip that […]
Each month the Commerce Department issues its Construction Put in Place (CPIP) data on the first working day covering activity two months earlier. July data was released on September 1st. Construction Put in Place is based on spending work as it occurs, estimated for a given month from a sample of projects. In effect the […]
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 at present is thirty five, the Chicago Fed Mid-West Manufacturing Index is still on hold to enable the staff to complete a major re-vamp of the […]