Market Update | December 11, 2024

 

NFIB SMALL BUSINESS OPTIMISM INDEX INCREASED SHARPLY


The November NFIB Small Business Optimism Index increased sharply, climbing 8.0 points to 101.7. This is up sharply since last November and is at its highest level since June 2021. The boost in November brings the index back above the 50-year average (98.0) after being below that market for 34 consecutive months. Of the 10 components within the overall index, nine increased in November, and one was flat. After seeing a record high last month, the Uncertainty Index dropped 12 points to 98 as business owners became more certain following the election.

 

PRICE

Domestic flat rolled pricing continues to show minimal movement weekly as spot buying activity continues to be soft. As lead times begin to move through January and the last buying opportunities for the year are here, expectations are for pricing to hold steady and begin to see a slight uptick possibly.

 

Input Costs

Zinc pricing increased slightly this week, improving for the third straight week.

  • Pricing was $1.42/lb this week, up slightly from $1.40/lb last week.

 

Spot iron ore pricing remained relatively steady this week, climbing slightly to $113/mt.

Coking coal pricing rebounded slightly this week, climbing to $204/mt from $202/mt last week.

  • Prices are up 0.4% from last week and are up 0.4% from this time last month.

 

SUPPLY

U.S. raw steel production rebounded last week, now up for the second time in the last three weeks.

  • U.S. steelmakers produced 1.668 million tons at a 75.1% utilization rate, up from 1.638 million tons last week and at the highest weekly total since mid-September (11 weeks).
    • Production was up 1.8% from last week but was down 1.7% from the same week last year.
  • YTD production is down 2.3% from the same timeframe last year.

 

Bloomberg recently reported that President Biden plans to formally block Nippon’s attempted acquisition of U.S. Steel on national security grounds once CFIUS completes its review later this month.

  • Nippon stated it will work with U.S. Steel to consider and take all available measures to reach a fair conclusion.

 

DEMAND

A key index used to measure nonresidential building projects that have gone into planning continued to slide in November, projecting a slowing spending trend over the next 9-12 months.

  • The November Dodge Momentum Index came in at 191.5, down from 196.0 in October but was still up from the 181.5 reading from last November.
    • The index has now declined in three consecutive months and is at its lowest level since May.
  • While institutional planning increased by 2.5%, a sharper 4.6% decline in planning for commercial projects brought the overall index lower.
    • On the commercial side, slower data centers, offices, warehouses, and retail planning drove the decline.
    • The institutional planning component, which is now up in 5 of the last 6 months, was led by strong growth in educational planning.

 

Shipments of North American (U.S. and Canada) tractors and combined continued to be weak in November.

  • Tractor and combine shipments totaled 13,002 units, down 49.0% from October and down 15.8% from 15,448 units in November 2023.
    • Looking at it on a year-over-year basis, to help smooth seasonality, shipments have now declined for 18 consecutive months and in 32 of the past 33 months.
  • Shipments of both tractors and combines declined sharply compared to last November, sliding 45.3% and 15.2%, respectively.
  • Year-to-date shipments are now down 14.4% compared to the same timeframe last year.

 

ECONOMIC

The November NFIB Small Business Optimism Index increased sharply, climbing 8.0 points to 101.7.

  • This is up sharply since last November and is at its highest level since June 2021.
    • The boost in November brings the index back above the 50-year average (98.0) after being below that market for 34 consecutive months.

 

Of the 10 components within the overall index, nine increased in November, and one was flat.

  • After seeing a record high last month, the Uncertainty Index dropped 12 points to 98 as business owners became more certain following the election.

 

According to the November report, the election results signal a major shift in economic policy, particularly for tax and regulation policies, that favor economic growth.

 

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.