New Report Preview

There were two very meaningful results this month in the ISM Steel Survey.

1. Imports to Decline. Buyers plan to use less foreign steel, with only 10% indicating plans to increase dependence on imports, down from 25% in December, which was the highest since 2006. Foreign prices are becoming less competitive – with only 23% of buyers now see foreign prices “below” or “well below” domestic, as compared to 42% saying “below” in January, and 8% saying “well below.” Similarly foreign offerings are disappearing, with NO buyers reporting foreign mills as “very aggressive,” down from a full 33% in January (an all-time high going back to mid-2003).

All of this is consistent with watching foreign prices rise at a faster clip than domestic in the past 6 weeks, which supports our view that imports should be declining.

2. New Manufacturing Facility Plans Hit a Peak. A whopping 54% of all respondents indicate plans to build new manufacturing facilities, an all-time high (going back to mid-2003) breaching the recent peak of 46% in August, 2011 – the pre-recession peak though was 46% in March, 2005. To quote the sage – “reports of the death of manufacturing” have been truly exaggerated.

For a free trial subscription, please contact us.