Market Update | January 31, 2024

 

CONFIDENCE AMONG U.S. CONSUMERS AT ITS HIGHEST READING IN OVER TWO YEARS

Confidence among U.S. consumers continued to increase in January and is now at its highest reading in over two years. The Conference Board’s January Consumer Confidence Index came in at 114.8, up from a revised 108.0 in December. This was the third consecutive monthly increase for the index. The boost in confidence in January likely came from slower inflation data, anticipation of lower interest rates, and generally favorable employment conditions.

 

 

Input Costs

As the recent up and down movement for zinc continues, pricing improved slightly this week.

  • Zinc pricing came in at $1.16/lb this week, up from $1.14/lb previously and remains right at the 90-day average.

 

Spot iron ore pricing held steady this week, holding at $137/mt.

  • Robust imports by China, sparked by optimism the world’s largest buyer of iron ore is adding enough stimulus to boost demand. These increased imports are helping to provide upward support to pricing to start 2024.

 

Pacific Basin met coal pricing slipped further this week, sliding to $325.50/mt.

  • Current pricing is down 1.4% from the end of last week but is up 0.5% from this time last month.

 

SUPPLY

U.S. raw steel production declined again this week, now down for the third week in a row.

    • US steelmakers produced 1.680 million tons at a 75.6% utilization rate.

 

DEMAND

Manufacturing activity, in the Chicagoland region, continued to contract in January and has now been in contraction for four of the last five months.

    • The January Chicago PMI came in at 46.0, down slightly from 46.9 previously but up from the 44.3 reading in January 2022.
      • ​The three-month average improved to 49.6, up from 48.9 in December and is at its highest level since falling into contraction in October 2022.
      • Any reading below 50 indicates a contraction in activity, while any reading above 50 shows growth.
    • While the new orders and employment improved slightly, albeit while still being in contraction, the production component fell into contraction in January.

 

ECONOMIC

Confidence among U.S. consumers continued to increase in January and is now at its highest reading in over two years.

    • The Conference Board’s January Consumer Confidence Index came in at 114.8, up from a revised 108.0 in December.
      • This was the third consecutive monthly increase for the index.
    • The Present Situation Index increased sharply, climbing to 161.3 from 147.2 previously.
      • The Expectations Index (short-term outlook) increased as well, climbing nearly 2.0 points to 83.8.
    • The boost in confidence in January likely came from slower inflation data, anticipation of lower interest rates, and generally favorable employment conditions.

 

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.