Market Update | February 26, 2025

 

UPWARD STEEL PRICING  MOMENTUM HAS ACCELERATED

The upward pricing momentum accelerated this week with prices now closing in on nine-month highs, with current mill offerings closer to fresh 52-week highs. Increased buying activity, steady demand, and rising costs, particularly from scrap, continue to add fuel to the current market upswing.

 

Input Costs

Zinc pricing slipped this week, now down for the second time in the last three weeks.

  • Pricing came in at $1.27/lb this week, down from $1.31/lb last week.

 

Spot iron ore pricing slipped slightly this week, now down for the second consecutive week.

  • The current price, $105/mt, is down slightly from $107/mt last week.

 

Coking coal pricing was down as well this week, slipping to $187/mt from $189/mt last week.

  • Prices are down 0.8% from last week but up 0.4% from this time last month.

 

SUPPLY

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

  • U.S. steelmakers produced 1.659 million tons at a 74.5% utilization rate, down from 1.670 million tons previously.
  • Production was down 0.7% from last week and was down 4.0% from the same week last year.
  • YTD production is down 0.8% from the same timeframe last year.

 

After sliding throughout the back half of Q4, global steel production rebounded to start 2025.

  • Global steel production came in at a 4.884 million mt/day rate in January, up 4.6% from December but down 4.4% from the 5.109 million mt/day rate in January 2024.
    • This was the first y/y decline since September.
  • While Chinese production was up 7.8% from December, production was down 5.6% compared to January 2024.
    • Production in China averaged 2.642 million mt/day, and the rest of the world averaged 2.241 million mt/day.
  • NAFTA production came in at a 289k mt/day rate in January, down 0.6% from December and down 0.4% from January 2024.
    • U.S. production slipped 1.1% from December, while both Mexico and Canada saw slight increases.

 

DEMAND

After climbing the previous two months, sales of new homes, on a seasonally adjusted basis, dropped sharply to kick off 2025.

  • January new-home sales came in at a 657,000 unit rate, down 10.5% from December and down 1.1% from the 664,000 unit rate in January 2024.
    • This was the lowest monthly sales rate since October.
  • Inventory of unsold new homes increased to 496,000 units at the end of January, the highest month end level since December 2007.
    • The current inventory, when combined with January’s sales rate, equates to 8.8 months of supply.
    • This is flat from December and remains above the five-year average supply level of 7.7 months.
  • The median sales price jumped to $446,000, up from $415,000 in December.

 

ECONOMIC 

Confidence from the U.S. consumer continued to slow in February, sliding 7.0 points to 98.3.

  • This is the biggest monthly decline in more than four years (August 2021).
    • The Confidence Index is now down for the third consecutive month.
  • Within the index, the Present Situation Index slipped to 136.5 while the expectations component dropped to 72.9.
    • The expectations component slipped below the key 80 threshold, which usually signals a recess ahead, for the first time since June 2024.
  • On a six-month moving average basis, purchasing plans for homes continued to recover, likely supported by the recent decline in mortgage rates.
    • On the other hand, buying plans for cars and big-ticket items were down.

 

 

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.