CHICAGO North American
steel shipments took a sharp dip in December, and soft sales
have continued into January for nearly every sector except
automotive, keeping lead times short and quelling any
expectation of a price run-up, market participants said.
Steel shipments by U.S.
distributors totaled 2.5 million tons in December, down 18.1
percent from Novembers totals and off nearly 28 percent
compared with Octobers volumes, according to data from
the Metals Service Center Institute (MSCI). Canadian service
centers also logged a significant reduction in volumes,
shipping 338,600 tons last month, down 31.6 percent month on
month and off some 35.3 percent compared with the first month
of the fourth quarter.
Shipments are always weaker at
the end of the year. "Customers dont like to put steel in
their shops (in December). Instead, they want it the first
shipping day of January," one Mississippi Valley processor
But even compared to the same
month last year, shipments were off sharply in December, the
data show, suggesting more than just typical seasonality was at
play. In December, U.S. steel shipments were off 14.4 percent
compared with the same month the previous year, while Canadian
shipments were down more than 19 percent year on year,
according to MSCI data.
And according to a number of
steel distributors, that weakness has persisted into January,
at least in some sectors.
"Things are pretty slow," said a
national distributor. "Within the markets we sell, customers
are saying things are OK but slow. We are not getting the big
(January) pop we got the last four years."
"We see demand as weak.
... Customers dont want to buy steel. A lot of
October tons are still on customers books. But there
seems to be a rant, cheerleading the industry into a place that
doesnt exist," agreed a source at a lower Great Lakes
service center that stocks the full gamut of sheet
A sheet distributor said one of
his suppliers noted that the January order book was filled.
Traditonally, bookings should be four to six weeks out to be
perceived as having some strength.
"Its Jan. 16! Thats
not good. I think its a mess," he said, noting that his
shipments this month are down from a year ago and "were
not getting pounded with inquiries. Our backlog is receding as
we ship and were not replenishing it at the same
But for others, steel demand is
a little patchier, with some segmentssuch as
automotiveeven showing signs of strength.
"All of our automotive customers
are booming," a strip-coil distributor said, adding that
January sales and shipments should line up with the same month
a year ago. "Im not behind on bookings."
A southern service center
executive agreed January sales have been spotty. "We have a
great day and then, holy cow, who cut our phone lines?"
With shipments down, steel
distributors inventories rose 4.6 percent in the United
States and 9.6 percent in Canada month over month in December,
Editor's note: This story was updated Jan. 17, 2012, to fix
a quote that was incorrectly attributed to a producer rather
than a sheet distributor.