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Driven by weakening flat-rolled volume (down 1.7% versus a normal seasonal increase of 2.7%), March MSCI shipments declined 0.5%, bucking the normal seasonal trend of a 2.3% uptick.

While total inventories in tons declined a modest 0.4%, flat-rolled inventories rose 0.7% while all other products showed declines of 1.2-4.7%.

Overall months’ supply (MOS) declined to 2.3 in March from 2.4 in February due to one extra shipping day, but would have been flat at 2.4 if the number of business days in the month were adjusted.

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

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Steel Market Production Cuts – According to the China Iron & Steel Association, China’s daily steel output fell by 1.5% in the last ten days of March compared to the previous ten days. During this period there were at least five major steelmakers under maintenance.

Steel Market Production Cuts – Italian longs producer Leali has announced that it is permanently idling its rebar rolling mill at Roe Volciano. The 400,000 tpy capacity mill has been idled since early 2011.

Steel Market Production Cuts – Lebanon’s only steelmaker Kfoury Metals has suspended production due to the high cost of fuel oil used to operate its captive power plant. The producer has 180,000 tpy billet capacity that is used to supply its 400,000 tpy rebar mill.

Steel Market Production Increases – Chinese seamless pipe producer Anhui Tianda Oil Pipe plans to double capacity at its 300,000 tpy high-grade seamless plant by the end of 2012. This move would bring the company’s total seamless capacity to 950,000 tpy.

Steel Market Production Increases – Saudi Steel Producer SABIC is close to completing construction of its new long product works. The new facility will have 1 million tonnes per year of EAF-based billet capacity and a 700,000 tpy wire rod mill.

Sources: Steel Business Briefing, MetalBulletin

Steel Market Production Increases –Libyan Iron & Steel Co intends to start production of coils this month at its hot strip mill pending final approval to restart by Gecol, the Libyan General Electric Company.

Steel Market Production Cuts –ArcelorMittal has reported that it intends to temporarily idle one of the two blast furnaces at its plant in Gijon, Northern Spain, in August for maintenance. The plant produces slabs, billets and blooms for re-rolling into long products.

Steel Market Production Cuts – The Polish steelmaking group, Alchemia is closing the meltshop at its seamless pipe plant Huta Batory in Chorzow, Southern Poland, following a strike by workers at the meltshop on April 2. The meltshop had a production capacity of 145,000 tpy.

Source: Steel Business Briefing

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Our Advance/Decliner Index continued to show stability, rising modestly from 71% last week to 74%; our Index has now traded in a tight band of 71-74% over the last four weeks (any reading over 50 means that the number of price increases exceeded the number of declines).

The small uptick was driven by our China Index rising from 55% to 75% as prices for most types of steel products trended higher on the back of a stronger-than-expected PMI reading.  Our Ex-China Index was relatively stable, falling from 76% from 73% as pricing in East Asia, the CIS and Europe showed less strength. An uptick in the US sub-index partially offset this slight softening, with both Nucor and Severstal following ArcelorMittal’s second sheet price increase last week.

Our full report provides further thoughts about global steel pricing trends and our outlook as well as implications for steel equities.

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Steel Market Production Increases – U.S. Steel Corp. plans to run 15 turns on its No. 3 galvanizing line at Hamilton Ohio. The line was originally planned to run 10 turns but increased to 15 because of increased demand for thin gauge material.

Sources: American Metal Market

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Reflecting general trends in trade in the Chinese economy, March Chinese steel net exports surged 74.6% to 3.72 million tonnes (mt), the highest level since June 2010, on a combination of a 48.4% jump in steel exports and a nominal 4.0% increase in imports.

While the March uptick in exports was actually in line with the normal seasonal pickup, the magnitude of the rise in imports was far less than normal, so the size of the increase in net exports was a surprise.

Although the increase in net exports is helping the Chinese market, it increases the risk of Chinese exports depressing global markets.

Our full report is available to subscribers only and provides further thoughts on China’s steel trade balance and the implication for steel equities.

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Steel Market Production Increases – Saudi Steel producer, SABIC has said that its steel production capacity will grow by 50% to 6 million tonnes per year when it completes its new plant in Jubail in the second half of this year.

Steel Market Production Increases – Iraq’s sole rebar producer, Erbil Steel, plans on expanding its rolling mill capacity from to 240,000 tpy to 360,000 tpy by early next year.

Steel Market Production Increases – Kuwaiti Pipe Industries & Oil Services Company plans to more than double its capacity with a new longitudinal submerged arc welded pipe mill set for commissioning in early 2013. The new mill will have 288,000 tpy capacity.

Steel Market Production Increases –Guangzhoe JFE Steel Sheet has formally commissioned a 400,000 tpy hot-dip galvanizing line at its south China plant, doubling the company’s hot-dip capacity to 800,ooo tpy.

Steel Market Production Increases – Bahraini Steelmaker, SULB has secured funding for its 1.5 million tpy capacity DRI plant, 970,000 tpy melt shop and 600,000 tpy heavy sections mill. SULB expects commissioning of the melt shop to begin in September while the DRI plant should come online in January 2013.

Steel Market Production Increases – Chinese steelmaker, Hebei Iron and Steel Group started work on its new welded pipe project in Caofeidian New Area. The project will have 600,000 tpy of electric resistance welded capacity and 500,000 tpy spiral welded pipe.

Steel Market Production Cuts – Moldavian Metallurgical Works in Moldava plans to reduce production of rolled steel to 25,ooo tonnes per month from 54,231 in March due to problems with scrap supplies.

Steel Market Production Cuts – Cascade Steel Rolling Mills suspended production at its McMinnville, Ore. facility due to workers launching a strike there this Sunday.

Steel Market Production Cuts – Two small fires temporarily interrupted steel production at RG Steel’s plant in Warren Ohio. Production was expected to resume by this afternoon.

Sources: American Metal Market, Steel Business Briefing,  SteelOrbis, Bloomberg, SteelGuru