Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Total daily steel shipments in the US increased by 5pc in July compared to June, reflecting an improvement over the 5pc declines historically seen during this month. 

 

Total carbon steel shipments declined by 12pc in July 2020 compared with the same month last year, reflecting a recovery compared to June’s drop of 23pc compared with June 2019, according to a KeyBanc report. 

 

The improvements in July are attributed to automakers resuming production and other key industrial businesses that have been gradually ramping back up to normal activity. 

 

Conversely, daily shipments of other carbon steel types comprised of bar, structural, and steel plate, declined modestly by 1-2pc in July compared to the prior-month period, with the limited movements likely due to a more resistant non-residential construction sector during Q2 2020.

 

Daily shipments of aluminum increased by 5pc in July 2020 compared to June while stainless-steel daily shipments rose by 4pc during the same period under comparison. The increases are also credited to automotive activity and consumer spending due to attractive interest rates and stimulus funds. 

 

Total carbon steel inventories declined by 4pc in July to 5.99mn nt from June, marking the third successive month of destocking, per the KeyBanc report. Total carbon inventories were at 2.3 months in July on month-on-hand (MOH) basis, inching down from 2.5 months in June.

 

Aluminum inventories in July indicated 2.9 months based on MOH compared to about 4.2 MOH in May, its highest level since Dec 2002, according to KeyBanc. At 2.2 months, Flat-rolled steel inventory remained close to its average 10-year standard of 2.3 months.

 

August licensing data indicates total steel imports rose by 1pc on average, with semi-finished imports increasing by 638pc and finished imports by 8pc. Successive progress was seen in sheet metal, which rose 19pc while rebar imports rose 97pc in August, according to KeyBanc.

 

Total imports currently indicate a decline of 23pc in the first eight months of the year, due to a 17pc drop in semi-finished product imports and a 26pc decline in finished product imports, both inferring low share gains to steel mills in the US.

 

Hot rolled coil (HRC) lead times were at 5.3 weeks in July compared to 3.8 weeks in June due to elevated purchase activity before prices increase. HRC spot pricing in the US declined by around $10/nt to approximately $450/nt ($496/mt) in July compared with the previous month but are starting to show signs of improvement. HRC prices in Northern Europe are also around $450/nt in July, an increase of $38/nt from the previous month.

 

Chinese HRC export prices rose by $40/nt to $455/nt in July compared with June while Russian Black Sea HRC export prices increased by $37/nt to $409/nt during the same period. Current global HRC prices provide for a US fair value equivalent of around $541/nt.

 

Cold rolled coil (CRC) spot pricing in the US increased by $12/nt to $639/nt in July compared with June with lead times of 6.4 weeks from 5.2 weeks during the same period. The gap between HRC and CRC is has increased by $20/nt to $189/nt in July from the prior month. US galvanized sheet lead times were at seven weeks in July compared with 6.2 weeks in June. 

 

Galvanized steel base prices rose by $11/nt to around $639/nt in July from the previous month, indicating a gap of $189/nt. Steel plate prices declined to $540/nt from $570/nt during the same period, with lead times somewhat unchanged at around 5.3 weeks.

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