U.S. service center total carbon steel shipments increased by 5.6% month on month (m/m) in March on a three month moving average (3MMA) basis. An encouraging trend, this was the third consecutive monthly (3MMA), increase after a run of 23 months in a row of declining m/m shipments.
Table 1 shows percentage change results for shipments, daily intake and inventory level. In all cases the percentage change references 3MMA year on year (y/y). For shipments and inventory, three columns of data are listed offering 12, 24 and 36 month changes.
There was considerable variation in shipments for the month of March between product groups. All products groups except pipe & tube posted year on year increases. Bar & shapes recorded the strongest growth, up 11.5% y/y, followed by plate at +6.5%, sheet at +5.6% and structurals at +4.1%. Pipe & tube posted a decline of 1.4% y/y.
Daily intake was up solidly across the board y/y, ranging from a low of 9.4% for pipe & tube to a surge of 28.3% for plate. Structural intake increased 11.7%, sheet rose by 10.9%, while bar & shapes swelled by 22.8%. Overall inventory levels declined by 7.1% y/y, pulled down by an 11.8% drop for pipe & tube and a 10.7% decrease for sheet. Structural inventory was higher by 12.4%, bar & shapes by 1.2%.
Figure 1 examines the history of inventory months on hand (MOH) from 2013 to present for both structural and bar & shapes. Structural MOH has been trending up throughout the timeframe referenced while bar & shapes MOH has exhibited a slight decline over the same period. Both product groups saw sharp MOH declines in March. Bar reached an MOH of 2.05, well below its five year average of 2.60. Structurals recorded an MOH of 2.50 in March, right on its five year average. If the MOH number is low and shipments are rising, daily intake will have to rise to maintain shipment levels. Good news.
At Gerdau we scrutinize the MSCI release every month searching for clues on the industry’s performance. It’s important to us as a significant supplier of long steel products to our service center customers. It’s equally important to keep our steel consuming consumers informed.