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August Steel Imports Plunge 76% Annually, Hit Another Recent Record Low
Yet another indication of just how dismal the economy is, was the recently announced non-existent demand for raw material imports, particularly steel, which saw was a mere 775k tons in August imports, a 66.5% decline from August of 2008, or a dollar value of $758 million down 76% from the $3.2 billion imported in August 2008. After a brief "second derivative" headfake in July numbers, the August results indicate that even as economists expect a massive pick up in inventories and what not, domestically America is using raw materials at a fraction of even 2008's run rate.
How this information will affect steel makers and service centers is as of yet unknown, although with destocking already having been occurring for many months, the complete lack of any tangible desire to restock is truly surprising.
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http://www.google.com/finance?catid=58211593
funny Financials graph, a stake in the heart of vampire squid?
Green Shoots! Green Shoots!
The metal building business is slow.
Not that surprising considering steel, except for the stainless variety, is usually used for things that need credit financing in order to have demand.
“It is a very wealthy country, and remarkable in the fact that the consuming power is still large notwithstanding a severe contraction in business. In time the country will emerge ... stronger and healthier than ever, and that means [good stocks] will soar to levels above the peak prices of last year.” Oct 1, 1930.
Baar, Cohen, & Co. "contrast current stock market with debacle last fall. Back then, business had been declining since June but the market kept rallying; now business has hit bottom and should improve, but the market ignores this condition just as it ignored the business decline... A year ago the public was in the market up to its neck - in fact, in some cases, above its head. Today the public is afraid to own stocks. We know of no better indication that a turn for the better is near.” Sept. 30, 1930.
Market bottom occurred 2 years later, down ~80% from the time of those quotes.
http://newsfrom1930.blogspot.com/
I was looking around the web for a longer-term chart. Anyone? If we've gone back to 2003 in many asset prices (stocks, houses, etc.) where did we stand with steel?
What of US Steel Production, though? What does that chart look like, and what % of US steel consumption is domestically produced versus imported?
That is required for a complete picture. If the US produces most of its steel, or if domestic steel production is large and growing, then the above graph is noise.
I'm not saying that's true, I just don't like out-of-context graphs of slices of the economy that slope down and to the right presented as evidence that the economy is headed off a cliff. It IS of course headed off a cliff, but that's no excuse for sloppiness and lack of intellectual rigor.
steel imports tell a pretty accurate picture; steel ( as a basic commodity for most manufacturing businesses ) is the best indicator of the state of manufacturing industry of the country. When i say best indicator of the state of manufacturing sector of the country, i say it so because most of the companies that actually make stuff outsourced their production. So, the picture remains the same, regardless of the angle you are looking it from.
Agreed. There is no other commodity as basic as steel when it comes to Mfg. Non ferrous metals (copper, zinc, aluminum) are dependant on steel. As steel goes, so go the others.
hey cheeky..hope all is well!
did you see Bruce Krasting's piece on sulfuric acid? would be very curious as to your thoughts on this subject if you have any.
i promise i won't ask you to marry me......
edit with link http://www.zerohedge.com/article/h2so4-%E2%80%93-lei
yo deadhead; yep all is well, and i hope its the same with you. now, about Bruce post on H2SO4; i mean this pretty much says it all
We use sulfuric acid in just about everything we consume. It is used in batteries, paint, fertilizer, ore processing, steel production and water treatment. It is a building block for a number of products like nylon, we pickle our food with it. By volume, it is the largest industrial chemical produced in the US.
Especially pay attention to the nylon production; because it can be an indicator of future sales and the condition of the CRE ( which is consequentially linked to the state of future sales ). Why nylon, you may ask; simply because, as far as i know it is still the most used material in production of bags which you put you purchased items. So keep a close eye on that piece of data, because it tells you story about the real state of thing in many many many sectors; and it doesn't lie.
Thanks cheeky...appreciate the insight!
Cheeky,
the H2SO4 story is a bit more complicated. Ore processing is a source of sulphur and in turn H2SO4; fertilizer consumes this acid.
Usual one-way plastic shopping bags are made of polyethylene and sometimes show recycling symbols reading PE, HDPE or LDPE.
Nylon has the sign PA that I have never seen on plastic shopping bags. Nylon is used in textile and industrial applications, see http://en.wikipedia.org/wiki/Nylon
BTW, I read your quote from Bruce's post again and was shocked about my sloppy reading. H2SO4 is not a common ingredient in pickled food but diluted acetic acid, commonly called vinegar.
edit: SO2 is sometimes used to prevent oxidation, wine is an example. If I remember correctly, the label reads "contains sulphites." With water it forms sulfurous acid (H2SO3)
Gunther
Sorry, didnt know that; thanks for correcting me on this one ....Basically, makes my observation worthless; cant edit goddammit.
I believe Nylon is also used to make those silvery jump suits everyone will be wearing in the future
Gee, is this bad news for the market...OR NOT...oh man, I am absolutely (there are no absolutes) floored by this...does anyone making hand over fist have any shame? Are they even human anymore...have the aliens taken over?
Are you one of Them?
wtf
Interesting...i wonder how much is used by the military industrial complex.
source??
So lets see, Railroad traffic down dramatically, Bulk Dry Index down and dropping, Steel Deman non-existent...WTF are green shoots made out of?
blow, whores, hopium and $-press
they are made of imagination
Peak Steel?
+1
+10
Look out for September's year on year comparisons...%age decreases will be a lot lower because we are comparing to low Sept. '08 (post crash) numbers. Reduced % declines yoy will be billed as more green shoots.
This is catastrophic for integrated domestic producers like AKS and X. At current pricing for hot band and cold rolled sheet, they can't produce profitably. Only the mini-mills like NUE, employing electric arc furnaces and scrap can make their nut. Compounding the issue, Mittal, AKS, and X are bringing more capacity back online due to the "recovery." You can see these dynamics in the stock price behaviors of these is issues.
Ewwww...what's that smell? Was that a green shart?
Did I read that right?
"Steal" is down?!?!
Obviously no one's been checking "Acorn"
Besides, we should replace the use of "green shoots" for that of "acorns" as it's both a seed and a "nut".
Apparently that is not true in Canada,where there is currently a shortage of quality steel for automotive industry.
Once more, the green shoots run headlong into the unforgiving wall called objective circumstances. I am sure we will much more of this, even with the effect the of "post Lehman" effect on yoy comparisons. Perhaps more folks will finally start looking for the historical trend data that TD loves to incorporate creating yet another wave of readership.
Last year, steel was in a bubble and most companies were building high inventories because of extremely long lead time. I know because like all our competitors in my industry, I made the mistake of ordering much more steel that needed leading to enough inventories for two years...
Anyway, my point is that the yoy numbers mean nothing, although the quarter over quarter are good indication. I would suggest looking at imports or production of iron ore which is a leading indicator for steel.
This is kind of an embarresing question (and off topic), but am I the only one who has to answer a math question before I post? Or a culling of the heard? I only ask becasue the "capthcha" thing just started.
No, you aren't the only one. I think it is based on a cookie, so everytime that you clear your cache, you will have to re-solve the captcha, same with going to a new computer. There is also a good chance that the cookie has a time limit, so you will see it periodically.
http://www.census.gov/foreign-trade/Press-Release/2009pr/08/steel/steelp...
Interestingly one of the underlying reasons that cash for clunkers I believe was enacted was to clear out the steel inventory held by suppliers. The supply tube had to be cleaned.
The chartists here may enjoy this chart with some trendlines:
http://tinyurl.com/yeeblul
What caught my eye was the way prices now were declining a little faster than the actual imported amount. Deflationary?
I wonder if there's a significant correlation to the value of the USD relative to the currencies of significant steel exporters that may be exacerbating the decline?