U.S. service center total carbon steel shipments increased by 1.6% year on year (y/y), in July on a three month moving average (3MMA), basis, its third consecutive monthly shipment increase. Shipments on a month on month, (m/m) basis fell 13.7%, but July was a 20 day shipment month, while July had 22 days. July’s tons per day, (tpd), volume fell 7,400 tons and was down 8,700 tpd from its year to date, (YTD) average of 149,300 tons.
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 and sheet posted year on year increases in shipments. Bar & shapes recorded the strongest growth y/y, with 15.7% 3MMA y/y. July plate shipments were up 8.4% 3MMA y/y. Structurals 3MMA y/y shipments grew by 5.1%. Sheet deliveries fell slightly, off 0.1%, 3MMA y/y. Pipe & tube posted a decline of 7.6% 3MMA y/y. Even though overall shipments have rebounded thus far in 2017, shipments remain at lower levels than both two and three years ago.
Bar and shapes shipments had a strong month helped by a 58.3%, 3MMA y/y surge in alloy bar shipments, a 19.7%, 3MMA y/y bump for cold finished and a 16.0% jump in special bar quality, (SBQ). On a down note, merchant bars shipments pulled the average down, tanking 21.8%, 3MMA y/y.
The overall inventory levels months on hand (MOH), was 2.21 in July, low by historic standards, (24 month average from 2013 to 2016 = 2.44 MOH). This indicates that intake will build to support the stronger shipment levels. In fact, on a 3MMA basis daily intake did increase for all product groups. For all product groups, intake increased by 3.4% y/y. Bar & shapes intake ramped-up by 23.3% y/y, sheet, + 2.1% y/y, plate +3.7% y/y. Structural intake advanced 6.1%, while pipe and tube intake was up 30.1% y/y.
Overall inventory levels fell by 4.4%, 3MMA y/y, as pipe & tube tumbled 11.2% y/y, sheet was off 6.6% and plate decreased by 2.6% y/y. Structural inventory increased by 0.6% y/y, and bar & shapes inventory grew by 7.9% y/y.
Bar & shapes 3MMA MOH was 2.42, +0.10 points m/m. Sheet’s 3MMA MOH was 2.07, +0.08 points m/m. Plate’s MOH was 2.79, +0.16 point m/m. Pipe & tube MOH was 2.49, down 0.03 m/m. Structurals MOH recorded a level of 2.72, plus 0.04 point m/m.
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.