Posts Tagged: ‘global steel’

Advance/Decliner Index Jumps Sharply

February 3, 2012 Posted by Steel Market Intelligence

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Our Advance/Decliner Index rebounded to 78% this week due to strength from our Ex-China Index which climbed back to 79% after falling from 92% to 66% last week due to broad-based strength across most regions.  Most notable was a pickup in Steel Business Briefing’s weekly pricing assessments for European hot-rolled sheet, plate, beams and rebar – with increases most evident for hot-rolled.

As is normal for the Golden Week holidays, our China Index declined from 50% to zero this week with only a single price change reported in the week making the reading meaningless.  However, we have seen a few indications of improved steel pricing in the country in the last few days which is good news for global pricing overall.

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Nucor (NUE) Holds the Line for Carbon Plate on Higher Imports; Hikes Heat-Treat Plate by $40

February 3, 2012 Posted by Steel Market Intelligence

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Nucor confirmed earlier reports this week that steelmakers had shelved a March plate price increase, most likely due to the significant uptick in January plate imports, in our view.

American Metal Market has reported that Nucor is holding the line for February/March plate prices – despite a $30/ton increase in the February scrap surcharge – following two hikes that lifted January list prices by $80/ton (or nearly 9%), but is raising heat-treat plate prices by another $40/ton for March that will lift list prices a total of $140/ton (an estimated 12-13%) since the end of the year.

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Unemployment Rate Drops to 8.3% in January

February 3, 2012 Posted by Steel Market Intelligence

In a bit of good news for the steel market, the U.S. unemployment rate slightly declined from 8.5% in December 2011 to 8.3% in January 2012, according to the latest figures from the Bureau of Labor Statistics. Total nonfarm payroll employment increased by 243,000 in January, primarily as a result of 257,000 new jobs in private sector areas such as professional and business services (70,000), leisure and hospitality (44,000), and manufacturing (50,000). The number of new manufacturing jobs added more than doubles the 23,000 added in December. The most recent previous months where manufacturing gained roughly 50,000 or more jobs were January 2011 (49,000) and August 1998 (142,000). Almost 154.4 million people participated in the civilian labor force, up from about 153.9 million in December, and 140.8 million people were employed, up from about 140.6 million in December.

Close to 13M Unemployed

A total of 12.8 million people were classified as unemployed in January, down 2% from about 13.1 million in December. Of these, 5.5 million, or about 43%, were long-term unemployed (27 weeks or more without a job). The remaining 7.3 million either lost a job or completed a temporary job.

Participation Rate Falls Slightly

In January, the civilian non-institutional population age 16 and older measured about 242.3 million, up from about 240.6 million in December. The civilian labor force participation rate fell slightly, however, in January from 64% in December. . Meanwhile, the employment-population ratio held steady at 58.5% and has changed little since September 2011 (58.4%).

Part-Time, Marginal, Discouraged Workers (please compare with December)

There was little month-over-month change in the number of people employed part-time for economic reasons (up 1%, from 8.1 million in December to 8.2 million in January). However, a more substantial increase occurred in the number of people marginally attached to the labor force (up 12%, from 2.5 million to 2.8 million), and discouraged (marginally attached people not currently looking for work, up 16%, from 945,000 to 1.1 million).

Source: Bureau of Labor Statistics

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January Import Licenses Jump to Seven-Month High Led by Rebar and Plate – First Look

February 1, 2012 Posted by Steel Market Intelligence

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Led by meaningful increases for rebar (up 131%) and plate (up 65%), January steel imports are up 21% from last month to 2.44 million tonnes, the highest level since last June, according to the Steel Import Monitoring and Analysis (SIMA) licensing program.  We believe that this pickup is already having some impact slowing steel’s recent pricing momentum, as we have seen a smaller price increase for rebar than other longs – $15 versus $30 – and trade press is reporting today that a hoped-for price increase for plate for March is being shelved.

We believe that domestic steelmakers showing sensitivity to these issues – with fighting imports via competitive prices rather than solely relying on trade enforcement a key component to the relative health of the steel market during this latest market downdraft, so this is good to see.

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Metals USA (MUSA) – Profitability and Demand Trending Higher in 1Q – Thoughts from the 4Q Conference Call

January 31, 2012 Posted by Steel Market Intelligence

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Metals USA reported 4Q earnings of $0.37/share, which adjusted to $0.33/share after non-recurring items, in line with the Street’s $0.32.

Guidance was qualitative with the company pointing to a more profitable 1Q compared to 4Q, and an “incrementally” more profitable 2Q versus 1Q.  Management said the “typical seasonality of the business is back” which is expected to lead to better demand in 1Q, although MUSA noted that the lagging impact of the company’s contract pricing mechanisms will hurt 1Q results but help in 2Q.

We’d note that the “typical seasonality” was actually never gone, but while demand has been fairly normal seasonally, it’s been supply – import/export balance and restarts – that has had as much impact on volume and pricing as end-demand at current ongoing low operating rates.

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December Steel Imports Post Surprising Drop; Full Year Rises 19%

January 31, 2012 Posted by Steel Market Intelligence

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December preliminary steel imports posted a surprising monthly decline, falling 5.3% to 2.0 million tons (mt) from October’s 2.11 mt, the lowest level since February and some 32.6% below the peak in May.  December licenses had suggested an increase of as much as 9% driven by a 50%-plus surge in semi-finished steel; however, actual semi-finished imports rose just 5.3%.  We suspect that some tonnage meant for December arrival was actually received in November as actual imports in November were 4% higher than licenses had suggested.

The monthly decline was driven by lower imports of cut-to-length plate (down 26.7%), OCTG (down 17.1%) and sheet (down 12.8%). However, based on current licenses, these declines are likely to be short-lived as tonnage for these products look set to increase in January, with significant increases possible for cut-to-length plate and OCTG.

In addition to slightly higher imports of semis, tonnage for rebar and wire rod jumped some 48.9% and 48.8%, respectively. Rebar licenses for January are showing an even further uptick, which could lift rebar imports to the highest level in nearly four years – which helps explain domestic steelmakers recent decision to hike domestic rebar prices less than other long products.

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Advance/Decliner Index Hitting Another High

January 26, 2012 Posted by Steel Market Intelligence

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Our Advance/Decliner Index jumped to 89% this week from 83% last week as pricing finally began to strengthen in China.  Our China Index rose from 33% to a 5-month high of 55%, as Chinese steelmakers raised export prices which will likely support higher pricing elsewhere.

Our Ex-China Index stayed high, rising nominally from 91% to 92%. Broad-based pricing gains continue to be driven by rising scrap prices and the anticipation of seasonally stronger 1Q demand, in our view.  In the US, Severstal “officially” announced another sheet hike – $30/ton – that will lift hot-rolled list prices to $770/ton – compared with actual prices of $720-750/ton currently.

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Nucor Raises Most Long Product Prices by $30; Rebar by $15

January 26, 2012 Posted by Steel Market Intelligence

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According to American Metal Market (AMM), Nucor is raising February transaction prices by the full $30/ton increase in the scrap surcharge for merchant bar (up 4%), wire rod (up 4%) and beams (up 4%), but is reducing base prices for rebar by $15/ton, resulting in a $15/ton increase (up 2%) in transaction prices, undercutting Gerdau’s recently announced $30/ton hike.  AMM cites Nucor’s John Ferriola as saying the smaller hike for rebar was due to an increase in imports, most notably from Turkey.

Nucor raised January prices for beams by $20/ton, rebar and merchants by $30/ton and wire rod by $40/ton.

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December Distributor Inventories Rise; Shipments Seasonally Weak

January 26, 2012 Posted by Steel Market Intelligence

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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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ABI Index Above 50 for Second Straight Month

January 26, 2012 Posted by Steel Market Intelligence

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The American Institute of Architects’ ABI Index – a leading economic indicator of non-residential construction activity 9-12 months into the future – remained unchanged from November at 52.0 in December, the highest level in a year and the first time the ABI Index has seen consecutive readings over 50 since February and March of 2011.  The reading above 50 means the number of architects reporting “rising billings” outpaced the number reporting “declining billings.”

At 64.0 in December, the new inquiries index was the third highest since January 2007, despite falling from 65.0 in November. While we are typically a bit cautious about putting too much weight on the new inquiries index because it does not account for rebidding, we would note that the new inquiries index has been much higher the past two months than during the first 10 months of the year when it ranged from 52.6 to 58.7 and the significantly higher readings have in fact coincided with higher overall ABI readings.

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