Continuing March’s trend, the ISM Manufacturing Index (PMI) shrunk more in April, ending at a 41.5 reading compared to March’s 49.1. The coronavirus pandemic and global energy market weakness acted as a one-two punch to near term conditions. As states begin to open back up, there is hope that activity has hit bottom and will begin to recover soon.
The April Consumer Confidence Index dropped to 86.9 from March’s 118.8. The decline was heavily influenced by the sharp contraction in economic activity and the surge in unemployment claims. Although consumers were pessimistic about current conditions, they are optimistic that the economy will show signs of improvement in the coming months.
What a ride it has been in April with WTI Oil Pricing . The month began at $20.21 per barrel, sunk into negative territory (-$37.63) in the middle of the month, and finally settled back at $18.84 per barrel to end. The past couple of months have revealed the biggest oil demand collapse in history. With storage tanks filling up quickly, the race to cut production and employ other measures to prop up prices is on. Expect oil price levels to remain depressed until the global economy begins a sustained rebound.
The online US Oil Rig count is at 408 which is down 256 compared to last month’s report and down 582 from May 3 of 2019. This roughly equates to a 60% drop since this time last year.
Nickel was one of the few commodities to actually gain value in the month of April. It started out the month at $5.11/lb. slowly increasing to settle at $5.56/lb. Reduced work forces at nickel mines due to COVID-19 have helped to buoy the price as a result of less supply in the short term.
Even with a few domestic steel mills idling portions of their capacity, the steel plate market remains fairly even keel with regard to pricing. As the economy inches closer towards opening back up, the spot market could see intermittent price fluctuations.
Domestic stainless mill deliveries are running from 6 to 7 weeks, while Duplex stainless mill deliveries and Nickel alloy plate deliveries are in the 7 to 9 week range. Carbon Steel plate mill deliveries are still in the 6 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.