Market Update | August 14, 2024

 

PRICES PAID BY U.S. CONSUMERS GREW AT LOWEST ANNUAL RATE SINCE MARCH 2021

The July Consumer Price Index showed prices for all goods increased 0.12% from June and were up 2.89% from July 2023. The index for shelter increased 0.4% in July, accounting for nearly 90% of the monthly increase. The CORE-CPI, which eliminates food and energy, saw prices increase 3.17% over the past year, the lowest annual increase since April 2021. Besides shelter, other notable increases over the last year include motor insurance (+18.6%), medical care (+3.2%), personal care (+3.4%), and recreation (+1.4%).

 

PRICE

Domestic sheet pricing remained relatively mixed this week as HRC held virtually flat, while both CRC and HDG pushed higher. HDG pricing is now at its highest level in a month.

 

 

Input Costs

Zinc pricing rebounded this week, after sliding the previous three weeks.

  • Zinc pricing increased to $1.22/lb this week, just slightly below the thirty-day average of $1.23/lb.

 

Spot iron ore pricing dropped again this week as well, slipping to $104/mt.

  • Iron ore pricing was down slightly from last week and is currently trending between the 30 and 90 day averages.

 

Coking coal pricing declined this week on the back of weak demand, the current coking coal pricing of $206/mt, down 4.4% from last week and down 16.9% from last month.

 

The Chicago #1 busheling scrap price officially settled sideways in August, holding at $380/gt.

  • Weaker export market activity/pricing, combined with a stronger push by the domestic mills, helped to overcome the reduced collection rates and increased finished steel price momentum, to keep pricing flat in August.

 

 

SUPPLY

U.S. raw steel production rebounded last week after sliding the previous two weeks.

  • U.S. steelmakers produced 1.735 million tons at a 78.1% utilization rate.
    • Production was up 0.8% from the prior week and up 0.1% from the same week last year.
    • YTD production is down 2.1% from the same timeframe last year.

 

 

DEMAND

Shipments of HVAC equipment increased in June, now up for the sixth time in the last seven months.

  • HVAC equipment shipments totaled 2.136 million units, up 8.7% from May and up 6.6% from June 2024.
    • This was the highest monthly shipment total in two years.
  • Looking on a year-over-year basis, strong increases in furnace and A/C & heat pump shipments overcame the slight decline in water heater shipments.
    • Furnace and A/C & heat pump shipments increased 15.9% and 10.4%, respectively.
  • Year-to-date shipments are up 2.8% compared to the first half of 2023 but are still nearly 8.0% below the first half rate from 2022.

 

Shipments of tractors and combines in the U.S. and Canada declined sharply in July and are now down for the third consecutive month.

  • Shipments totaled 21,128 units, down 17.4% from June and down 14.3% from July 2023.
    • This was the fourteenth consecutive month with a year-over-year decline.
  • While shipments of combines increased sharply from June, the decline in tractor shipments overshadowed that small increase.
    • Tractor shipments were down 18.5% from June and down 14.0% from July 2023.
  • Year-to-date shipments are now down 12.4% compared to the first seven months of 2023.

 

 

ECONOMIC

Prices paid by U.S. consumers grew at their lowest annual rate since March 2021.

  • The July Consumer Price Index showed prices for all goods increased 0.12% from June and were up 2.89% from July 2023.
    • The index for shelter increased 0.4% in July, accounting for nearly 90% of the monthly increase.
  • The CORE-CPI, which eliminates food and energy, saw prices increase 3.17% over the past year, the lowest annual increase since April 2021.
    • Besides shelter, other notable increases over the last year include motor insurance (+18.6%), medical care (+3.2%), personal care (+3.4%), and recreation (+1.4%).
    • These increases helped to overcome declines in prices for used vehicles (-10.9%), airline fares (-2.8%), and new vehicles (-1.0%).

 

 

 

This material, information and analyses (the “Content”) may include certain statements, estimates and projections prepared with respect to, among other things, historical data and anticipated performance.  Content may reflect various assumptions by Majestic Steel USA, Inc. concerning anticipated results that are inherently subject to significant economic, competitive and other uncertainties and contingencies and have been included for illustrative purposes. Content is provided AS-IS.