Data from the US Federal Reserve Bank shows that the Durable Goods Manufacturing Production Index declined by 0.1% in June, TUBE SHOW 2024 found out. The data had increased by 0.1% in the previous month. However, durable goods production is still 0.8% higher than the same period last year.

In June, durable goods manufacturing output presented a mixed picture, with declines in motor vehicles and parts (-3.0%), non-metallic mineral products (-1.2%), and machinery (-0.8%) outweighing increases in other industries.

Except for automobiles and machinery, industries dominated by tubes showed positive growth compared to May, including aerospace and miscellaneous transportation equipment (+1.6%); furniture and related products (+0.6%); fabricated metal products (+0.2%); electrical equipment, appliances, and components (+0.1%); and miscellaneous manufacturing (+1.8%). Overall, motor vehicles and parts increased by 36.7% in the second quarter, becoming the strongest growing industry during this period.

However, the June manufacturing report released by the Institute for Supply Management (ISM) shows that manufacturing as a whole remains weak. The latest report pointed out that the Purchasing Managers' Index (PMI) contracted for the eighth consecutive month, falling 0.9 percentage points to 46.0 in June. The New Orders Index rose by 3 percentage points in June compared to May, but it remained in contraction territory at 45.6.

The Production Index was 46.7, down 4.4% from 51.1 in May. The decline in the Production Index caused the backlog reading to rise to 38.7, up from 37.5 in May.

In the report, ISM Chair Timothy R. Fiore pointed out that 71% of manufacturing output contracted in June, down from 76% in May. Although there was improvement, more industries contracted more severely. The composite PMI calculation equal to or below 45 accounts for 44% of US manufacturing GDP, an indicator of overall weakness in manufacturing, up from 31% in May.

TUBE SHOW 2024 cited ISM data saying that transportation equipment was the only tube-dominated industry reporting growth in June. Tube-dominated industries, including miscellaneous manufacturing, contracted, such as electrical equipment, appliances and components; fabricated metal products, etc.

Pipe, Tube and Steel Mill News

Husteel, a company of South Korea's Shinan Group, invested $122 million to establish a brand new ERW tube factory in Splendora, Texas, to produce tubing products for oilfield applications. The product size range of the factory is 2-3/8 to 4-1/2 inches, with wall thicknesses up to 0.394 inches. This is Husteel's first factory in the United States, expected to start production in 2025.

The American building and tubular product manufacturer, Bull Moose Tube, has announced that its new factory in Sinton, Texas is now operational and capable of providing high-quality products.

Shipping and Imports

The shipment volume of rough-processed pipelines and pipes increased by about 3.5% compared to May. The forecasted shipment data may be slightly adjusted at the time of shipment.

Compared to the same period last year, preliminary shipments in June increased by 6.7%, with most of the growth benefiting from domestic demand. Shipments of manufacturing and construction products declined by 1.0% in June compared to May, with both projected shipments and expected imports declining. Shipments of manufacturing and construction products were 1.7% lower than the same period last year.

Preliminary shipments of mechanical tube products closely related to manufacturing decreased by 10.7% in June compared to May and were 7.1% lower than the same period last year.

Outlook

The US Federal Reserve raised its benchmark interest rate by 25 basis points at its July meeting. It is rumored that if necessary, the Fed will further tighten monetary policy. Short-term interest rates have now reached their highest level in 22 years.

Although inflation and rate hikes have brought headwinds to the economy, it remains strong. The US GDP grew at an inflation-adjusted rate of 2.3% in the second quarter, exceeding both the growth in the first quarter and the consensus forecast for the second quarter by 0.3%.

Employment growth remains robust. The substantial increase in consumer-end GDP this year is largely related to the growth in service expenditures, coupled with a strong economic growth momentum, the manufacturing sector is expected to rebound rapidly.

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