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Archive for: ‘February 2012’
Advance/Decliner Index Jumps Sharply
New Report Preview – Steel Market
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
New Report Preview – Steel Prices
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
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
Carpenter Technology (CRS) – Fiscal June Outlook Stronger on Better Aerospace and Energy Demand – Thoughts from the DecQ Conference Call
New Report Preview – Stainless Steel
Carpenter Technology (CRS) reported DecQ (fiscal 2Q) diluted earnings of $0.52/share, which adjusted to $0.57/share excluding costs related to the acquisition of Latrobe Specialty Metals, ahead of the Street’s $0.51/share.
Guidance for the second half of fiscal 2012 (ending in June) was for higher volume, revenue and operating income levels on the Carpenter business compared to the first half with the company still on track to achieve the full-year target of a 50% increase in operating income (excluding non-cash pension EID expense). Management said second half margins will likely remain around current levels as the benefits from higher volume are offset by some negative LIFO impact from reducing inventory at current nickel prices. Regarding the Latrobe acquisition, the company still expects positive EPS accretion in the first full year of ownership, although there will be some initial costs immediately following closing (sometime in MarQ), which will cause a small negative EPS impact in the remainder of fiscal year 2012.
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January Import Licenses Jump to Seven-Month High Led by Rebar and Plate – First Look
New Report Preview – Steel Market
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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