SCS Material Market Monitor

October 2012

A monthly publication of Steel City Supply . . .

Welcome...

This monthly Market Monitor on materials critical to the manufacturing sector, is provided free of charge to customers, suppliers, and friends of Steel City Supply.


It is our hope that you will find the information contained herein timely and relevant to your upcoming business decisions.


Enjoy!

Manufacturing Economic Overview

  • As reported by the ISM, The August PMI (Purchasing Managers Index) lowered to 49.6% which was a 0.2 decrease of July's PMI reading. This is the lowest reading since July of 2009.
  • A reading above 50% indicates an economic expansion, while a reading below 50% indicates economic contraction.
  • Eight of the 18 manufacturing industries are reporting growth, one of which are Primary Metals.

Carbon Steel

  • The global composite steel price dropped to a 24 month low by late July 2012.
  • U.S. steel shipments have increased 5.8% in 2012 , compared to the same seven month period in 2011.
  • According to the American Iron and Steel Institute, U.S. steel imports have dropped over 8% from June to July, for both raw and finished steel products

Stainless Steel

  • Because of a recent gain in Nickel premiums (a main cost component of 304 & 316 SS), the industry expects Stainless Steel pricing to pickup in October and beyond.
  • Due to lower Stainless Steel demand, surcharges have hit their lowest level in over a year.
  • Most industry sources feel that the market is near to bottoming-out.

Copper

  • Copper prices for the quarter have climbed 10%, as analysts expect the price of copper to grow through the next quarter.
  • A recovery in the U.S. housing market, coupled with newly found uses in the medical field, have the industry expecting growing future demand.
  • Expect recycled copper to rise in price, as global copper production lags behind demand.

Aluminum

  • The LME's 3-month Aluminum price rose 1% to $1,890 per metric ton.
  • Aluminum prices have shown interesting strength in the last month because production cutbacks have begun to lower available aluminum stocks.
  • Many analysts expect the recent price run-ups to fizzle and fade because producers have failed to cut capacity to match declining global demand.

Scrap Metal

  • Ferrous scrap prices rose 25% in August as mills bought-up inventory in anticipation of increasing demand and possible scrap shortages.
  • Most industry analysts expect September and October prices to stabilize in which August price gains should hold.
  • Japanese scrap prices are beginning to stall. Tokyo Steel cut one of its key scrap purchase prices.

Sources

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