Market Update | August 7, 2024

 

U.S. LIGHT VEHICLE INVENTORY DECLINED SLIGHTLY IN JULY

U.S. light vehicle inventory totaled 2.655 million units, down 5.3% from June but still up nearly 50% from last July. Light vehicle inventory has now seen a year-over-year increase for twenty-five consecutive months. Inventory of domestic light vehicles led the decline in July as car and light truck inventory declined 8.1% and 6.9%, respectively. Inventories of imported vehicles increased 2.3% from June and are at their highest level since March 2021.

 

PRICE

Domestic sheet pricing was mixed this week as the market continues to search for a solid bottom. While HDG pricing slipped again, both HRC and CRC prices increased.

 

 

Input Costs

Zinc pricing continued to slide this week, now down for the third consecutive week.

  • Zinc pricing dropped to $1.18/lb this week, and remains below the thirty-day average of $1.23/lb.

 

Spot iron ore pricing rebounded this week as well, climbing to $109/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 increased supply, the current coking coal pricing of $214/mt, down 0.7% from last week and down 15.6% from last month.

 

 

SUPPLY

U.S. raw steel production slipped again last week, now down for the second consecutive week.

  • U.S. steelmakers produced 1.722 million tons at a 77.5% utilization rate.
    • Production was down 0.4% from the prior week but up 0.6% from the same week last year.
    • YTD production is down 2.2% from the same timeframe last year.

 

Preliminary flat rolled steel import licenses for July were up 1.2% compared to June.

  • Hot-dipped galvanized import licenses were down however, sliding 3.7% compared to June.

 

 

DEMAND

After climbing in June, U.S. light vehicle inventory declined slightly in July.

  • U.S. light vehicle inventory totaled 2.655 million units, down 5.3% from June but still up nearly 50% from last July.
  • Light vehicle inventory has now seen a year-over-year increase for twentyfive consecutive months.
    • Inventory of domestic light vehicles led the decline in July as car and light truck inventory declined 8.1% and 6.9%, respectively.
  • Inventories of imported vehicles increased 2.3% from June and are at their highest level since March 2021.
  • The current inventory total, when combined in July’s sales pace, equates to 52 days of supply.
    • This is down from 56 days in June and remains below the pre-pandemic average of 65 days.

 

The combination of weaker domestic mill shipments and limited imports helped to push total carbon steel consumption lower in June.

  • Total carbon steel consumption (steel shipments + imports – exports) came in at a per/day rate of 260.4 thousand tons in June, down from 276.2 thousand tons/day in May and down 8.2% from 283.8 thousand tons/day in June 2023.
  • June carbon flat rolled consumption came in at a rate of 146.1 thousand tons/day, down from the 152.7 thousand tons/day rate in May and is down 4.0% from the 152.3 thousand tons/day rate from last June.
    • The year-over-year decline in June ended a streak of fourteenth months with a year-over-year increase.
    • YTD carbon flat rolled consumption is now up 5.3% compared to the same timeframe last year.
  • Per/day coated flat rolled consumption declined in June after hitting its highest daily rate since April 2022 in May. Coated consumption declined 3.1% to a 57.7 thousand tons/day rate.

 

 

 

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.