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US, Canada steel shipments drop in November

Keywords: Tags  Metals Service Center Institute, MSCI, steel shipments, steel inventories, Corinna Petry


CHICAGO — As service centers close out the year’s steel purchases and contemplate demand for the first quarter of 2014, a few say they are building inventory ahead of both higher orders and price increases while most others are staying the course and keeping inventories low.

Service center steel shipments in November saw month-on-month declines of 19.1 percent to just under 3.07 million tons in the United States and 11.1 percent to 473,000 tons in Canada, according to the latest data from the Metals Service Center Institute.

Part of the decline was attributed to the Thanksgiving holiday in the United States, but tons shipped per day still fell 7 percent to 153,400 tons month over month in the United States and 2.1 percent to 23,700 tons in Canada.

Steel inventories held by U.S. service centers fell 1 percent month on month to 7.98 million tons (2.6 months’ supply at current shipping rates) in November, while Canadian steel inventories rose 0.9 percent to 1.26 million tons (2.7 months’ supply) in the same comparison.

"We are keeping our inventory at a normal level. We are buying off demand (even though) we think there will be another price increase in the next month," a source at one Great Plains distributor told AMM.

"We’re set pretty well for January inventory. We aren’t purchasing much for now," said a source at a lower Great Lakes distributor, who added that she wondered whether the latest price increase announcements will be widely accepted. "We are waiting to see where things fall out."

On the sell side, "we do have orders increasing for the first quarter, so we hope things might ramp up," she said.

An eastern service center operator said that he is buying all the steel he can get under the terms of his current supply contract, believing the same opportunity won’t be available on the domestic spot market next month.

He was one of several distributors who told AMM they were taking advantage of competitive low-priced foreign offers on hot-rolled, cold-rolled and galvanized sheet, some of which will be arriving even before year-end but additional cargoes arriving well into April. "We just bought cold-rolled from China (at) $31.50 per hundredweight ($630 per ton) delivered on the East Coast. ... That’s just the tip of the iceberg," he said.

A pipe and tube distributor source said he welcomed announced price increases for January. "I don’t think the prices can get lower. So we’ll maintain good balance of inventory to supply customers adequately," he said.


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