Economic growth forecasts fall; steel use is erratic

Wed 28 May 2008

Moving on to steel...the International Stainless Steel Forum forecast stainless steel production to increase 6% to 29.32 million metric tons this year, driven mostly by Asian mills...last year’s 27.7 million metric tons produced included a stock draw of more than one million metric tons...recovery in 2008 is credited to growing industrial consumption, but sharp increases in input costs, they say, pose a possible danger to demand.

According to the latest steel production report from the International Iron & Steel Institute, world crude steel production for the first four months of this year totaled 457.29 million metric tons, up 5.7% compared with the Jan-April 2007 period... China produced 169.8 million metric tons of crude steel, an increase of 9.1% compared to the same period in 2007...U.S. steel production, meanwhile, was placed at 33.77 million metric tons, up 6.5%...

Looking next at domestic steel shipments, the March figure was lower by some 2% year over year...first quarter shipments, however, at 27.6 million tons...shipments were up 4.9 % compared with the first quarter of 2007...April carbon steel inventories, as reported by Metal Service Center Institute, were higher as flat rolled shipments by the service centers fell, offsetting increases in plate, beams, bars, and pipe & tube...Michelle Applebaum Research (MARI) credits higher inventories at the nation’s service centers (highest in seven months) with some inventory building along with higher imports...does this signal a trend? Will we continue to see higher production, increasing imports and lower domestic shipments? MARI, however, expects to see “only small building of inventory” going forward...

Watch industrial production data. Reason: Many believe the relationship between industrial production and mill shipments is an important indicator of demand for flat products in particular since it measures output in automotive, appliance, utility, and energy sectors – all major consumers of steel.

Source Purchasing.com

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