As The World Turns (Around)
Since our last review just 6 weeks ago many changes have taken place within the global steel industry, which directly affects what goes on here in the US.
Some of the contributing factors for the reversal in escalating prices are the results of:
- numerous market conditions
- rapid increase of Scrap transaction prices
- higher prices on imported products by as much as $100.00 per ton and higher in some products
- increased demand
- diminishing inventories on hand
- some tariffs have been placed on various imported steel items and in turn the amount of product into the US seems to be diminishing in tons.
There is speculation that this trend will continue for a short period of time and perhaps may retreat as we enter into the 3rd quarter, only time will tell.
Construction remains one of Economy’s Bright spots
The US construction industry added 37,000 new jobs in March according to the US Bureau of Labor statistics. On a year over year basis construction employment expanded by 301,000 net new jobs, the industry’s largest annual increase since May of 2015. The job growth number tells us that construction remains one of the US economy’s leading economic drivers. Continued job growth helps support both spending power and confidence. The construction industry unemployment rate remained unchanged at 8.7 percent in March but remains almost a full percentage point lower than the same time a year ago.
After declining for the entire year of 2015 Scrap has once again shown that it can rebound and in just the past 90 days has increased $100.00 per ton. There are many that predict an additional $30.00 to $40.00 per ton within the next couple of weeks. These scrap increases plus future anticipated increases means mill pricing will most likely follow along and send out mill increases.
US Raw Steel Production
In the week ending April 23, 2016 mills produced 1,684,000 net tons down .5% from the previous week. Mills have produced 28,213,000 tons so far this year down 2.2 percent from the same period last year.
As always we will attempt to keep our customers up to date on the latest developments within the steel industry. If we can help explain what’s currently going on in our industry, give our HarMac office a call: 207-935-3531.