CHICAGO Although total
U.S. steel shipments in October were on the rise, service
centers outlook for the balance of the fourth
quarterespecially in terms of their confidence in
replacing stockhas dimmed.
U.S. steel shipments by
companies reporting to the Metals Service Center Institute
(MSCI) jumped 14 percent in October vs. September to 3.51
million tons, MSCI data show. As total shipments increased,
stocks on hand fell to 2.4 months worth of supply from
2.8 months worth in September.
But while total shipments were
on the rise, the rate of tons shipped per day pared back
slightly in October, according to MSCI data, with U.S.
distributors shipping 152,600 tons per day last month, down
from 162,000 tons per day in the shorter September period.
Canadian shipments logged a
similar trend, with total steel shipments rising 11.4 percent
month on month to 523,400 tons in October. At the same time,
the rate dropped to 23,800 tons per day from 24,700 tons per
day in September, while Canadian stocks fell to 3.2
months worth from 3.5 months worth previously.
The lower inventories may
reflect a hesitancy to build stocks before year-end, sources
"We have let inventories run
down, so we are in a better (financial) position," an executive
in the cold-rolled and coated sheet business said.
Customers are pacing themselves
month to month, agreed a Midwest distributor. "I am staying
extremely cautious on the buy side," he said.
Meanwhile, distributors are
still waiting to see whether the most recent $50-per-ton price
hikes on flat-rolled steel have legs. That increase, which most
buyers agree is still on shaky ground, came on top of a
$40-a-ton increase earlier this fall.
"We have seen new pricing but
nothing has been enforced," a Midwest coil distributor said
Thursday. "Were not sure what to anticipate for our next
move. Even the mills that announced (price hikes) havent
The first published increase was
accepted, he said, "but there were concessions on extras and
other terms." On the second increase, its too early to
tell, he said.
If all of the total $90-per-ton
increase takes effect by Jan. 1 in a rising scrap market, the
executive in the cold-rolled and coated sheet business said he
believes buyers might once more build stocks. "You will see
some people make (strategic) buys," he said.
And, at least for one
distributor, some of that strategic buying might have already
"We are not reducing
inventories," reported a Southeastern service center sales
executive. "We are building (stock) on items we know are going
up. ... Its a bit of a hedge buy" on long products.