New Report Preview – Steel Market

December MSCI shipments declined 14.6%, nominally better than the normal seasonal drop of 15.7%, as we saw stronger-than-usual shipments for pipe (down 8.4% compared with a normal decline of 10.7%), flat-rolled (down 16.6% versus a normal drop of 18.3%) and bar (down 10.6% compared with a typical decline of 12.3%), while plate shipments were weaker than the norm, down 13.4% versus the normal seasonal drop of 11%, as rising imports gained share.

Total inventories rose 3.2% to 7.95 million tons in December, mainly driven by a 4.9% uptick in flat-rolled tonnage as steel buyers purchased sheet ahead of anticipated price increases.  Inventories of plate and pipe increased 3.2% and 1.3%, respectively, while tonnage of bar and beams fell a healthy 2.9% and 1.8%.  Total December inventories were nearly 50% higher than the August 2009 low of 5.3 million tons, although December average daily shipments were some 38% above the December 2009 low.  Inventories for flat-rolled, plate, bar and pipe are substantially above post-recession lows – even more so for flat-rolled and plate – while beam inventories are just 2.2% above the lowest level on record seen in October 2010.

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