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May MSCI data affirms the view that the current weakness in the domestic steel market is driven off of a surplus of supply rather than a dearth of demand, as domestic distributors sold more steel than any month except one since the start of the recession.

May shipments rose 3.1% from April.  There was strength across almost the entire product spectrum, but particularly in flat-rolled, which rose 4.1%, more than the normal seasonal uptick of 3.5%, and the second highest level of shipments for a month since the start of the recession, reflecting solid demand from automotive in particular.  The weakest point in the survey was plate, where shipments rose a scant 1.1%, against a normal seasonal uptick of 4.5%.

Our full report is available to subscribers and provides further thoughts on May distributor shipments and inventories by product as well as implications for steel equities.

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