The ISM Manufacturing Index (PMI) continued progress in July, increasing from June’s 52.6 mark to reach 54.2 – which is a 15-month high reading. The underlying data revealed a mixed bag of information, with new orders picking up while simultaneously experiencing continued employment contraction. While there are many remaining uncertainties, there is hope that manufacturing continues to build steadily throughout the fall months.
Retreating from June’s 98.1 mark, July’s Consumer Confidence Index registered a 92.6 reading. Consumers became less optimistic about the short term prospects of the economic and labor markets. Uncertainty surrounding the rise in virus infections, tepid business conditions, and financial insecurity all acted as negative influences on sentiment.
Much like the previous month, WTI Oil Pricing hovered in a tight band during July, beginning with a value of $39.82 per barrel, only to settle at $40.27 per barrel. The prevailing sentiment has oil continuing to stick near the $40 per barrel mark for the short to medium term. Even if demand picks up, the expiration of OPEC production cuts would likely offset that consumption, keeping the commodity value near the current level.
The online US Oil Rig count is at 251 which is down 8 compared to last month’s report and down 691 from August 2 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 every day as fuel sources.
For the first time since January, Nickel Pricing crossed the $6.00/lb. threshold in July, beginning the month at $5.83/lb. and continuing to climb until closing at $6.25/lb. Speculation, more than anything else, appears to be behind the commodity’s rise as nickel production is in a state of surplus while consumption is modest at best.
There was no appreciable movement with steel plate prices for the month of July. As U.S. steelmakers began to restart idled capacity, increased production outpaced any recovery in demand, keeping pricing in check. Lower demand from the energy sector and heavy machinery could have a downward impact on pricing in the second half of 2020.
Domestic stainless mill deliveries are running from 5-7 weeks, while Duplex stainless mill deliveries and Nickel alloy plate deliveries are in the 7-10 week range. Carbon Steel plate mill deliveries are still in the 5-10 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.