U.S. service center total carbon steel shipments increased by 3.2% year on year (y/y), in June on a three month moving average (3MMA), basis. This was an encouraging trend as it was the sixth consecutive monthly shipment increase.
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. All products groups except pipe & tube posted year on year increases in shipments. Bar & shapes recorded the strongest growth y/y, with 17.1% y/y. June plate shipments were up 8.1%. Structurals y/y shipments grew by 5.1% and sheet deliveries improved by 2.1%. Pipe & tube posted a decline of 8.7% y/y. Even though shipments have rebounded thus far in 2017, with the exception of sheet in 2015, (+1.4%), shipments remain at lower levels than both two and three years ago.
The overall inventory levels months on hand (MOH), was 2.09 in June, low by historic standards, (36 month average from 2013 to 2016 = 2.55 MOH). This suggests that intake should build to support the stronger shipment trend. In fact, on a 3MMA basis daily intake did increase for most product groups with the exception of pipe & tube and structurals. For all product groups, intake increased by 4.5% y/y. Bar & shapes intake ramped-up by 17.7% y/y, sheet, + 6.0% y/y, plate +3.1% y/y. Structural intake fell by 4.2%, while pipe and tube intake was down 2.9% y/y.
Overall inventory levels fell 5.5%, 3MMA y/y, as pipe & tube plummeted 19.0% y/y, sheet was off 6.0% and plate decreased by 2.2% y/y. Structural inventory increased by 0.6% y/y, and bar & shapes inventory rose by 2.3% y/y. Bar & shapes MOH was 2.33, +0.07 points m/m. Sheet’s MOH was 1.94, +0.02 points m/m. Plate’s MOH was 2.65, +0.14 point m/m. Pipe & tube MOH was 2.52, +0.04 m/m. Structurals MOH was the highest at 2.39, down 0.19 point m/m.
Figure 1 presents total carbon shipment history from 2007 to present. MSCI carbon steel shipments peaked in 2007. On this chart, January 2007 is represented as 100% for each product. From that point forward, the subsequent month’s shipments are shown as a percent of January 2007. All product lines have staged a rebound in shipment levels YTD 2017. Flat products have rebounded more rapidly than longs. June 2017 sheet shipments at 79.8% of January 2007 shipments, posted the strongest recovery to-date, followed by plate shipments at 66.2%. For long products, pipe & tube have recorded the best recovery, currently standing at 60.8% of January 2007 shipments. Rebar and structurals both stood at 55.2% of January 2007 shipments.
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.