CHICAGO Steel buyers faced softened demand, excess supply, short lead times and weak pricing in April, an industry survey shows.
According to the Institute for Supply Managements latest Steel Buyers Forum survey, more respondents cut inventory last month, with the proportion of those holding more than 60 days of steel falling some 7 percentage points from March. Meanwhile, the proportion of member companies deeming their inventories as "too high" fell about 16 percentage points month over month.
As a result, fewer purchasing managers felt the need to cut inventories further. Half said that they would shed steel over the next six months, down from about 55 percent saying so in March.
More buyers expect the next three months to bring fewer orders (17 percent vs. 9 percent in March), while the share of those forecasting an upswing in new orders fell by nearly half month over month. Meanwhile, the proportion of those predicting rising backlogs dropped 20 percentage points.
The share predicting a decline in economic activity over the next six months more than doubled to 22 percent, and those predicting a rise in activity shrunk by about 10 percentage points.
"The market is improving," particularly with spring construction season under way, an East Coast flat-rolled distributor said. But with the oversupply, "mills have to realize they cannot continue to pump out tons."