“The steel company leaders that we have been seeing at various meetings have been much more optimistic than their customers,” says Charles Bradford, the principal analyst at Bradford Research of New York, adding that data “confirms what we have been hearing from various service centers, that the steel markets are quite weak.”

Inventories at U.S. steel service center fell by 240,000 tons in April to 14.6 million tons but the calculated months of supply rose to 3.2 from 3.1 in March. “The problem was a 289,000 ton decrease in shipments, a drop of 6% compared to shipments in March,” according to Bradford. He says this implies there was a decrease in steel purchases by the U.S. service centers of 530,000 tons in April, a large figure considering total mill shipments in March were 9.3 million net tons.

Shipments by mills and service centers have been healthier lately for bars, rails and some structurals, reflecting slippage in imports more than robust end-user demand. In fact, overall April service center deliveries of carbon steel were down for the eighth consecutive month. In Canada, the overall service center shipments decline in April was even steeper 10% pushed inventories up by 4% to 1.3 million tons.