Market Update | February 6, 2025

 

MANUFACTURING SECTOR EXPANDED IN JANUARY

Economic activity in the manufacturing sector expanded in January, the first expansion after 26 consecutive declines. The ISM Manufacturing Index came in at 50.9 in January, up from 49.3 in December and up from 49.1 in January 2024. Solid increases from both the production and new order components helped to push the overall index higher. The new order and production components increased to 55.1 and 52.5, respectively.

 

PRICE

While the outlook remains mostly positive for future pricing movement, pricing for domestic sheet saw a glimmer of hope this week.

  • Clarity on initiatives from the new administration, steadily declining coated sheet imports, and overall demand increasing should help provide a boost to pricing through Q1 and into Q2.

 

Input Costs

Zinc pricing rebounded slightly this week, now up for the third time in the last four weeks.

  • Pricing came in at $1.33/lb this week, up from $1.29/lb last week.

 

Spot iron ore pricing rebounded slightly for the third consecutive week after hitting a four-month low three weeks ago.

  • The current pricing, $114/mt, went up from $113/mt last week.

 

Coking coal pricing started the year on a weaker note as well, sliding to $186/mt from $188/mt last week.

  • Prices are down 1.5% from last week and are down 3.0% from this time last month.

 

SUPPLY

U.S. raw steel production increased slightly last week, climbing after a recent slide.

    • U.S. steelmakers produced 1.656 million tons at a 74.4% utilization rate, up from 1.641 million tons previously.
    • Production was up 0.9% from last week and up 0.8% from the same week last year.
  • YTD production is up 1.0% from the same timeframe last year.

 

The Commerce Department on Tuesday issued preliminary subsidy rates in the corrosion-resistant steel (CORE) trade case.

  • The agency set minimal countervailing duty (CVD) rates for Brazil and Mexico, primarily high rates for Vietnam, and low rates for Canada, except for one privately held distributor.
  • U.S. Customs and Borders Protection (CBP) will immediately begin collecting CVDs on coated steel imports.

 

The announced tariffs of 25% on both Canada & Mexico have been delayed for 30 days.

  • The additional 10% tariff on goods from China remains in place.

 

DEMAND

After a stronger than expected sales rate in December, which was buoyed by pulled ahead demand for EV’s, January light vehicle sales slipped in January.

  • January light vehicle sales came in at a 15.60 million unit rate, down 7.5% from December but was up 3.8% from the 15.03 million unit rate in January 2023.
    • This was the fifth consecutive month in which sales increased on a year-over year basis.
    • ​​​​Despite the slowdown from December, this was the strongest January sales rate since 2021.
  • ​Severe weather mid-month and the SoCal fires negatively impacted demand but could provide a bump come February/March.
  • The average sales price slipped to $44,636, down 0.5% from December.​

 

Total construction spending continued to push higher in December, albeit slightly below the long-run trend.

  • December construction spending came in at a $2.192 trillion rate, up 0.5% from November and up 4.3% from the $2.101 trillion rate in December 2023.
    • This is the third consecutive month-over-month increase and the fourth increase in the past five months.
  • A strong boost in residential spending helped to overcome a slight decline on spending for nonresidential projects.
    • While nonresidential spending slipped 0.2% from November, residential spending was up 1.55.
    • Residential spending was up 6.1% on a year-over-year basis, the strongest y/y increase since May.
  • For the full year 2024, total construction spending was up 6.5% compared to 2023.

 

Economic activity in the manufacturing sector expanded in January, the first expansion after 26 consecutive declines.

  • The ISM Manufacturing Index came in at 50.9 in January, up from 49.3 in December and up from 49.1 in January 2024.
  • Solid increases from both the production and new order components helped to push the overall index higher.
    • The new order and production components increased to 55.1 and 52.5, respectively.
  • The backlog of orders component dove deeper into contraction in January, sliding to 44.9 from 45.9 previously.
    • The inventory component contracted as well, sliding to 45.9 from 48.4 previously.​

 

 

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.