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February 22, 2016

The Market Tracker: MSCI Reports Shipments Down For Both Steel And Aluminum

  • The Metals Service Center Institute announced last week that shipments declined from 2015 levels in January for both steel and aluminum in the United States and Canada at roughly the same rates as last month. In January 2016, U.S. service center steel shipments decreased by 13.3 percent from January 2015. Steel product inventories decreased 20.1 percent from January a year ago. In January U.S. service center shipments of aluminum products decreased by 5.6 percent from the same month in 2015. Inventories of aluminum products decreased 6.3 percent from January a year ago. In January 2016, Canadian service center shipments of steel products decreased by four percent from January 2015. Steel product inventories decreased 19.2 percent from January a year. Canadian service center aluminum shipments, excluding extruded shapes, decreased 15.1 percent in January from the same month in 2015. Inventories of aluminum products decreased 22 percent from January a year ago.
  • Last week, the Organization for Economic Cooperation and Development (OECD) lowered its predictions for global, U.S. and Canadian economic growth. The OECD now expects the global economy to expand just three percent this year, down from its previous estimate of 3.3 percent, and 3.3 percent in 2017, down from its last estimate of 3.6 percent growth. The OECD expects the U.S. economy to expand two percent this year, down from its previous estimate of 2.5 percent, and 2.2 percent in 2017 (down from 2.4 percent). The OECD also reduced its projections for Canadian growth to 1.4 percent for 2016 (from two percent) and 2.2 percent for 2017 (from 2.3 percent).
  • Canadian manufacturing sales increased 1.2 percent in December 2015 from the month before. (Analysts had expected a 0.7 percent increase.) Inventories were down 1.6 percent in December. According to Reuters, the better-than-expected showing was the result of strong motor vehicle and wood product sales. Despite the improvement in December, however, overall manufacturing sales fell 1.5 percent in 2015, the first drop since 2009. In other manufacturing news: wholesale sales in Canada rose two percent in December, well ahead of the 0.2 percent increase that analysts had predicted.
  • Industrial production in the United States increased 0.9 percent between December 2015 and January 2016 as utilities output increased 5.4 percent and manufacturing production rose 0.5 percent. Output at mines was flat in January.
  • Regional manufacturing readings have been mixed so far this month. The Federal Reserve Bank of New York announced last week that its manufacturing index for the state of New York increased to -13.6 in February from -16.6 in January. Readings for new orders and employment improved significantly and the shipments sub-index improved modestly. The Federal Reserve Bank of Philadelphia, meanwhile, announced that its manufacturing index rose to -2.8 in February from -3.5 in January. Despite the modest improvement, readings for new orders, shipments, inventories and employment all fell. It was the sixth month in a row that the index had showed contraction in the region’s manufacturing sector. 
  • According to the U.S. Department of Labor, the number of individuals who filed for federal unemployment benefits fell to 262,000 for the week that ended Feb. 13 from 269,000 the week before. The four-week moving average of first-time claims also fell, but the number of individuals who continued to file for benefits increased. That figure rose to 2.273 million for the week that ended Feb. 6 from 2.243 million the week before.
  • In other economic news: the number of new homes under construction in the United States fell by 3.8 percent from December 2015 to January 2016, but was still 1.8 percent above the January 2015 level; the Conference Board Leading Economic Index, a gauge of future economic growth, fell 0.2 percent in January, but remained at a level that continued to show modest growth over the next six months; and the U.S. producer price index 0.1 percent in January while the consumer price index was unchanged.