CHICAGO U.S. manufacturing activity expanded at a modest pace in most regions from October through mid-November, although steel product demand was mixed, according to the Federal Reserve Boards latest economic conditions report.
Survey responses from industries in each of the 12 Federal Reserve Bank districts indicated uneven demand for steel products despite strong sales and production in the automotive industry and vibrant energy production.
The Chicago district "highlighted the (auto) industry as a main source of strength due to a large number of new vehicle launches and increasing demand for medium- and heavy-duty trucks. Cleveland and St. Louis also reported increased motor-vehicle production."
Steel producers in Dallas and San Francisco indicated that demand was steady, while producers in Cleveland and Chicago experienced a slight drop-off in production even as they started to see lower steel import volumes.
In the Cleveland region, "steel shipping volume is below expectations due in part to customers keeping inventories at low levels." Mills dont expect market conditions to change appreciably in the next few months, according to the report.
The Chicago survey showed steel production fell slightly even though imports were down and demand from service centers rose. Specialty metal manufacturers reported slight declines in new orders and backlogs through year-end.