|Title:||United States monthly steel sheet consumption, imports, exports, and shipments in tons and including imports and exports as percentages for August 2010 through October 2011|
|Source:||Metal Center News|
Start of full article - but without data
U.S. Steel Sheet Shipments, Prices - Aug. 2010-Oct. 2011
Month Consumption Import % Shipments Exports Export % HRC Spot Price $/Ton
Aug. X.XX XX.X% X.XX X.XXX X.X% $XXX 2010 Sep. X.XX XX.X% X.XX X.XXX X.X% $XXX 2010 Oct. X.XX XX.X% X.XX X.XXX X.X% $XXX 2010 Nov. X.XX XX.X% X.XX X.XXX X.X% $XXX 2010 Dec. X.XX XX.X% X.XX X.XXX X.X% $XXX 2010 Jan. X.XX XX.X% X.XX X.XXX X.X% $XXX 2011 Feb. X.XX X.X% X.XX X.XXX X.X% $XXX 2011 Mar. X.XX XX.X% X.XX X.XXX X.X% $XXX 2011 Apr. X.XX XX.X% X.XX X.XXX X.X% $XXX 2011 May X.XX XX.X% X.XX X.XXX X.X% $XXX 2011 Jun. X.XX XX.X% X.XX X.XXX X.X% $XXX 2011 Jul. X.XX XX.X% X.XX X.XXX X.X% $XXX 2011 Aug. X.XX X.X% X.XX X.XXX X.X% $XXX 2011 Sep. NA NA NA NA NA $XXX 2011 Oct. NA NA NA NA NA $XXX 2011
Source: Metal Strategies Inc.
Carbon sheet shipments in the U.S. reached a monthly high around X.X
million tons in August. The August price for hot-rolled coil, around
$XX per ton, was off the 2011 high seen in April by over XX percent.
While underlying demand for carbon flat-roll continues to improve, albeit slowly, fears about the staying power of U.S. manufacturing are exerting downward pressure on steel prices. The market's uncertainty is causing many buyers, service centers and OEMs alike, to remain on the sidelines rather than invest in inventories that may lose value.
"It's still the same demand picture--slow and steady--but it isn't strong enough to support the recent price increases," says Amy Bennett, principal steel consultant for London-based Metal Bulletin Research. "Early in September, the price announcements brought some buyers to the market [ahead of the increase] and the mills were able to get some of their increase through, but now prices have backed off again." She attributes the recent weakness to the widespread pessimism that remains the prevailing sentiment in the steel sheet market. Indeed, this negative attitude has actually overshadowed the true demand.
"Flat-roll demand is actually stable, though at a somewhat mediocre level" because service centers and their customers remain so cautious, says Sheldon Tenenbaum, senior vice president of supplier development for Los Angeles-based Reliance Steel & Aluminum Co.
Buyers can hardly be blamed for being so tentative in an economy that's still so tenuous. Talk of a possible double dip recession in the U.S., the effects of the euro zone's sovereign debt crisis on global trade, strife in the Middle East and po-litical gridlock in Washington all weigh heavily on the American psyche.
"The U.S. economy continues to struggle to emerge from the Great Recession," says Daniel R. DiMicco, chairman and chief executive officer of Nucor Corp., Charlotte, N.C. "It has been unable to move to a path of vibrant and sustainable growth, but this is not surprising. Our nation has failed to implement real solutions to eliminate the structural imbalances that are driving our economy deeper and deeper into a hole."
"What our economy needs most is jobs, jobs and more jobs," he adds. "This can be accomplished with a multi-pronged plan for the United States to achieve new energy independence, enforce rules-based free trade, rebuild our crumbling infrastructure, reform and simplify the tax code and reduce the burden of excessive regulation on our economv."
Bill Jones, vice chairman of O'Neal Industries Inc., Birmingham, Ala., doubts the U.S. economy is headed for a double dip. "From our experience, and from feedback from our customers, it appears business is better than what we are reading. While still weaker than we would like, end-use demand has actually been improving," he says.
Christopher Plummer, managing director of Metal Strategies Inc., West Chester, Pa., forecasts a X to X percent net increase in flat-roll consumption this year, with comparable improvement in 2012. August's U.S. apparent consumption of steel sheet totaled X.X million short tons, up XX.X percent from a year earlier.
"The flat-rolled market actually got off to a good start during the first six months of 2011, spurred in part by auto builds," notes Scott Gosselin, general manager-commercial of the northern region for Severstal North America, Dearborn, Mich. Automotive's strength actually has been surprising, he adds, especially considering the parts supply issues earlier this year caused by the Japanese earthquakes and tsunami.
"I don't think the Japanese-owned new domestic automakers will truly make up for that lost production until the first quarter of next year," says Dave Howard, chief commercial officer for RG Steel LLC, Sparrows Point, Md. "But the supply chain has now been restored and production has begun to ramp up."
Plummer estimates that NAFTA passenger car and light truck production will approach XX.X million vehicles this year, up X.X percent from the XX.X million made in 2010. And the industry could produce an additional million units in 2012--quite a comeback from the X.X million vehicles produced in 2009 during the depth of the recession.
Flat-roll consumption also has gotten a boost from the strong demand for heavy-duty trucks, Howard says. Truck replacement is high due to the aging U.S. fleet and earners seeking to buy before the next step-up in government fuel efficiency standards raises the cost of engines.
Gosselin points out that a lot of hot-rolled steel is used by the oil and natural gas industry, not just for oil country tubular goods used in down-hole applications, but also for spiral-weld line pipe. "Even though energy prices have fallen recently, exploration, especially in the Marcellus and other shale plays, continues to be quite strong," he notes.
According to Baker Hughes Inc., Houston, X,XXX rigs were drilling in the United States as of Oct. XX, up XX.X percent from a year earlier and more than double the low of XXX rigs operating during the recession.
Also trending up is demand for carbon sheet in the industrial equipment market, especially for construction, agricultural, mining and other off-highway heavy machinery. "This sector is generally a mid-cycle performer, but this time they are doing well early in the economic cycle, driven largely by exports," Plummer says.
The only two flat-roil markets that are down significantly are nonresidential construction and drilling in the Gulf of Mexico, which has been a victim of the political and regulatory tug-of-war ever since the BP oil rig disaster, says Louren Goncalves, president and chief executive officer of Metals USA Holding Corp., Fort Lauderdale, Fla.
Commercial construction, which is a large flat-rolled steel consuming industry, remains in the doldrums, down X to X percent in 2011, says Plummer. "We expect it to flatten out next year, but not be strong for a while."
Home appliance shipments have been hurt by the ongoing weakness in the housing market. Production of refrigerators, ranges and other kitchen equipment is up about X percent year on year, according to the Association of Home Appliance Manufacturers, mostly due to home remodeling.
Even though steel demand overall has steadily improved this year, flat-roll pricing has experienced a roller coaster ride. "Prices were ridiculously high midyear. Everyone believed they would fall. So no one was buying more than they needed and were keeping inventories at bare minimum levels," says John Anton, director of the steel service of IHS Global Insight in Washington D.C.
Hot-rolled coil prices peaked at nearly $XXX a ton in April, then plunged by almost XX percent over the next five months to about $XXX a ton in August. After two price increases by the mills, one for $XX followed closely by another for $XX a ton, prices regained some ground to over $XXX a ton last month, Plummer reports.
"Despite initial resistance, the mills essentially got the first price increase once they announced the second," MBR's Bennett says. "That lasted about two weeks before prices started falling back." Currently, she adds, hot-rolled coil is selling for as low as $XXX a ton.
"Steel service centers and OEMs are maintaining low inventory positions and do not wish to purchase material in excess of their immediate needs. Short lead times from the mills make this possible," she says. As of late September, U.S. service center flat-roll inventories remained at a relatively lean X.X months of supply on hand, despite a X.X percent month-on-month shipment decline.
"The fact that service centers are watching price and inventory levels isn't anything out the ordinary," says Richard Tcets, executive vice president for steelmaking at Steel Dynamics Inc., Fort Wayne, Ind. Mill backlogs are back to where they were at the beginning of the year, so lead times are relatively short. "Service centers are buying for need, trying to keep their inventories at their X.X- to X.X-month sweet spot."
Tenenbaum at Reliance expects service centers to reduce their flat-roll inventories even further. "We usually like to do that toward the end of the year."
RG Steel's Howard believes the fact the supply chain is running so lean could help the market in the long run. "With such low inventories, it won't take much of a change in demand to have an immediate impact on replacement activity, and that could cause a surge in flat-rolled shipments. Such restocking, however, is not generally expected to happen before early next year."
Mills needed to seek the price increases this fall to protect their margins, Plummer says. "Domestic flat-roll mills have been burdened in the last XX months by soaring raw material prices [largely as a result of Chinese demand], while the economy, end markets and steel pricing here were still generally weak."