Steel shipments tick upward in May

Steel mills in the United States shipped more than 7.7 million tons of products this May, according to the Washington-based American Iron and Steel Institute (AISI). That figure represents a 3 percent increase from the 7.5 million tons of steel shipped in April.

Steel shipments compared with last year, however, remain in a downward trajectory, with the May figure down 2.4 percent from the more than 7.9 million tons shipped in May 2022.

Shipments of more than 36.6 million tons in the first five months of the year represent a 4.4 percent decline from the more than 38.3 million tons shipped from January through May of 2022.

The encouraging 3 percent rise in steel shipments in May occurs at the same time the U.S. Census Bureau reports a 0.2 percent decrease in nonresidential construction spending the same month, offering a conflicting signal.

“Nonresidential construction spending declined in May, ending a streak of 11 consecutive monthly increases,” says Anirban Basu, chief economist of the Washington-based Associated Builders and Contractors (ABC). “While spending is up more than 17 percent over that span, manufacturing-related construction has accounted for the majority of that increase. Excluding the manufacturing segment, nonresidential construction spending is barely outpacing inflation, up just 6 percent over the past year.”

Domestic steel demand, along with overseas demand for ferrous scrap, are likely leading factors as U.S.-based mill companies and scrap processing firms engage in negotiations for the July buying period.

According to Davis Index, U.S. mill buyers are making early July bids for ferrous scrap that are down from $20 to $30 per ton compared with June pricing.

On the overseas demand front, Davis Index is reporting slightly lower bids being made (and accepted) for overseas heavy melting steel (HMS) grades in Turkey. One bright spot for U.S. scrap shippers in July could be India, where bids for imported scrap have been rising in early July, according to the metals pricing service.