Market Update | August 28, 2024

 

NEW ORDERS FOR MANUFACTURED DURABLE GOODS INCREASED SHARPLY IN JULY

New orders climbed 9.9% to a $289.6 billion rate. The sharp jump in July follows a nearly similar 6.9% decline in June. Excluding the volatile transportation segment, new orders slipped 0.2% from June. While primary metal new orders declined 0.9%, new orders for fabricated metal products increased 0.2% from June. Unfilled orders for durable goods increased 0.2% in July and are now up in forty-seven of the last forty-eight months.

 

PRICE

Domestic flat rolled product pricing increased this week on the back of increases from both HRC and CRC.

The combination of the upward movement from CRU and move higher from Nucor, should continue to improve market sentiment as a clear bottom has been formed.

 

Input Costs

Zinc pricing rebounded this week, now up for five consecutive weeks.

  • Zinc pricing increased to $1.33/lb this week, hitting its highest level in more than a month.

 

Spot iron ore pricing rebounded this week, climbing to $109/mt from $103/mt previously.

  • 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 $196/mt, down 4.2% from last week and down 11.3% from last month.

  • This was the first time pricing has slipped below $200/mt since 2022.

 

 

SUPPLY

U.S. raw steel production increased again last week, now up for the third consecutive week.

  • U.S. steelmakers produced 1.782 million tons at an 80.2% utilization rate.
    • Production was up 1.6% from the prior week and up from the same week last year.
    • YTD production is down 1.9% from the same timeframe last year.

 

Based on preliminary import licenses, steel imports, for the first 25 days, in August are trending down 5.7% compared to July.

 

After slipping in June, total carbon steel imports increased in July, climbing 15.5% in July.

  • On a per-day basis, total steel imports increased 11.8% from June.
  • Carbon flat rolled imports increased as well,climbing to 592,751 tons.
    • This is up 1.7% from June and up 8.4% from 443,115 tons in July 2023.
    • Per-day flat rolled imports declined however, slipping 1.6% from June.
  • With in flat rolled, both hot rolled and cold rolled sheet imports increased from June while coated sheet imports slipped.
    • Total coated sheet imports totaled 309,328 tons down 13.3% from June but were still up 46.0% from July 2023.
    • Hot-dipped galvanized imports came in at their lowest daily rate since February.
  • Year-to-date flat rolled imports are now up 34.8% compared to the same timeframe last year.

 

Canada announced it will impose 25% import tariffs on Chinese steel and aluminum products, with the levies taking effect on October 15.

  • The move does not come as a surprise given Canadian steel and aluminum industries have been calling for tariff alignment with the U.S.
  • As a reference, YTD Canada imported ~264kt of steel products from China, with imports more heavily tilted to structural, OCTG, wire and CRC products.

 

 

DEMAND

New orders for manufactured durable goods increased sharply in July, climbing 9.9% to a $289.6 billion rate.

  • The sharp jump in July follows a nearly similar 6.9% decline in June.
    • Excluding the volatile transportation segment, new orders slipped 0.2% from June.
  • While primary metal new orders declined 0.9%, new orders for fabricated metal products increased 0.2% from June.
  • Unfilled orders for durable goods increased 0.2% in July and are now up in forty-seven of the last forty-eight months.
    • Unfilled orders, excluding transportation, were flat after a slight 0.1% increase in June.
    • Primary metal unfilled orders were up 0.1%, while fabricated metal product new orders were virtually flat.

 

 

ECONOMIC

Confidence among U.S. consumers increased again in August, now up for the second consecutive month.

  • The Consumer Confidence Index came in at 103.3, up from 101.9 in July.
  • The present situation component came in at 143.4, up from 133.1 in July.
  • The expectations component, a short-term outlook, also improved in August to 82.5.
    • This is up from 81.1 in July and is now above 80 for the second consecutive month.
  • Compared to July, consumers were more positive about business conditions, both current and future, but also more concerned about the labor market.

 

 

 

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.