45 Days & Counting
There are 45 days remaining in 2016!! … where did the time go? Elections are done and while the dust settles, I find myself asking, what will it be like by the end of 2016? The uncertainty makes it difficult to soundly put together budgets, forecast and projections, with so many unknowns. We are a strong nation and have gotten through rough times before; still fresh in our memories are the many economic hardships we all had to deal with starting in 2008. We picked up the broken pieces and moved on in the American Way, finding solutions for our broken economy!
Construction spending has been holding steady and is up 5% for the first three quarters of 2016 compared to same period in 2015. While demand for construction remains robust, it is no longer growing like it was earlier in the year. There are those that believe that new investments in our aging infrastructure would greatly offset any decline in private construction. Some industry officials feel congress should act right after the election, and not wait until January to enact a bill that will help school districts to set up programs that teach construction skills, to enable more students to pursue construction careers to help supplement the shortage of qualified construction workers.
Scrap over the past 30 days has dropped approximately 9% dropping $20.00 per ton down to $198.00 per GT for shredded Chicago. Within the past few weeks, exports have been being booked at higher numbers by approximately 10%; however Turkey scrap buyers this week bypassed the US and went elsewhere and shopped in the UK. Several Domestic steel mills have already sent out mill increase letters effective now, in anticipation of the increase in scrap prices. Some Domestic mills have already made buys this month for their scrap at approximately $20.00/GT up from October pricing. Some are stocking up now in anticipation of the Holiday season and as always the possible disruption of scrap flows due to inclement winter weather. At times it almost seems predictable but to be on the safe side we suggest don’t take too much for granted, if you don’t think things will change just give it a little time, more than likely change will come.
U.S. Raw Steel Production
In the week ending October 29, 2016 mills produced 1,575,000 net tons down 1.4% from the previous week of 1,597,000 net tons. U.S. Mills have produced 73,525,000 net tons so far this year down 1.9% from 74,951,000 in the same period last year. With less than 60 days left and the Holiday season nearly upon us, I would dare say the overall tonnage for 2016 may be down approximately 2% from 2015.
As always, we will attempt to keep our customers up to date on the latest developments within the steel industry, call our HarMac office for assistance. 207-935-3531