Industrial Manufacturing News

July 2020 – Industrial Manufacturing and Raw Material News

June’s ISM Manufacturing Index (PMI) jumped from the 43.1 reading in May to a 52.6 mark in June. This is the first expansion for manufacturing in 3 months. Employment increases, production resumption, and new order data helped to propel industries forward. Hopefully this trend continues during the second half of the year.

Registering a mark of 98.1, June’s Consumer Confidence Index improved upon May’s 85.9 reading . A surge in hiring and consumer spending, as well as positive housing market trends contributed to the rebound in confidence. With several states curtailing activities to mitigate virus case counts, it is uncertain if these actions will dampen sentiment in the near term.

WTI Oil Pricing traded in a fairly narrow band during the month of June, however it did manage to build upon the gains earned from May. The commodity began with a value of $35.44 per barrel, ultimately settling at $39.27 per barrel to close the month. Even though oil prices just registered their best quarterly performance in 30 years, they are still down over 30% compared to the start of 2020. The balance of 2020 will likely see measured price volatility, but is unlikely to see another steep crash.

The online US Oil Rig count is at 263 which is down 21 compared to last month’s report and down 700 from July 3 of 2019. This roughly equates to a 70% drop since this time last year with these historic lows. This key and leading indicator shows the current demand for products used in drilling, completing, producing and processing of hydrocarbons which all of us use everyday as fuel sources.

Nickel’s movement was fairly steady in June with a $5.73/lb. mark to start and a $5.81/lb. price to close. Typically, Nickel doesn’t see much upward movement in the second half of calendar years, but 2020 is no typical year. Traders are cautiously optimistic that a return to work could help move the commodity closer to the $6.00/lb. threshold.

Lack of overall demand dampened the domestic steel mills mood as prices faced downward pressure in June. This short term trend should reverse soon with many sectors beginning to resume operations, helping drive more demand.

Domestic stainless mill deliveries are running from 5 to 7 weeks, while Duplex stainless mill deliveries and Nickel alloy plate deliveries are in the 7 to 10 week range. Carbon Steel plate mill deliveries are still in the 5 to 10 week range.

Tubing deliveries range from 3-8 weeks for stainless steel depending upon stock availability and up to 8-14 weeks for nickel alloys. Carbon steel tubing deliveries are still carrying longer lead times anywhere from 6-16 weeks.