Market Update | July 24, 2024

 

PRELIMINARY FLAT ROLLED STEEL IMPORT LICENSES DOWN 21.1%

Preliminary flat rolled steel import licenses, for the first fifteen days of July, were down 21.1% compared to the same period in June. Hot-dipped galvanized import licenses are down sharply as well, sliding 19.5% compared to the first two-plus weeks of June.

 

PRICE

Domestic flat rolled pricing continued to slide this week as both cold and hot-dipped galvanized price are at new 52-week lows. Hot rolled was flat however, potentially signaling a bottom to this downward cycle.

 

Input Costs

After slipping slightly last week, zinc pricing dropped sharply this week.

  • Zinc pricing dropped to $1.20/lb this week, and is well below the thirty-day average of $1.28/lb.

Spot iron ore pricing declined this week as well, sliding to $108/mt.

  • Iron ore pricing was down 1.2% from last week and is currently trending below both the 30 and 90 day averages.

Coking coal pricing declined this week on the back of increased supply, the current coking coal pricing of $225/mt, down 5.0% from last week and down 5.9% from last month.

 

SUPPLY

U.S. raw steel production increased again last week, climbing to a seven-week high.

  • U.S. steelmakers produced 1.739 million tons at a 78.3% utilization rate.
    • Production was up 0.2% from the prior week and up 3.0% from the same week last year.
    • YTD production is down 2.3% from the same timeframe last year.

 

Preliminary flat rolled steel import licenses, for the first fifteen days of July, were down 21.1% compared to the same period in June.

  • Hot-dipped galvanized import licenses are down sharply as well, sliding 19.5% compared to the first two-plus weeks of June.

 

DEMAND

U.S. light vehicle production declined in June, sliding for the first time since December.

  • June U.S. light vehicle production totaled 852,913 units, down 11.1% from May and down 5.9% from 906,089 units in June 2023.
    • This was the second consecutive month and the third time in the last four months in which light production declined on a year-over-year basis.
  • ​​Production of both cars and light trucks declined in June, sliding 11.4% and 11.0%, respectively from May.
  • Despite the decline in June, YTD production is still up​ 4.1% compared to the first half of 2023 and is up 3.6% compared to the first half of 2022.​

 

Existing home sales continued to slump in June, now sliding for the fourth consecutive month.

  • Existing home sales came in at a 3.890 million unit rate, down 5.4% from May and also down 5.4% from June 2023.
  • ​Actual sales totaled 375,000 units, down 13.4% from June 2023.
    • Year-to-date actual sales are now down 3.3% compared​ to the first half of 2023 and are down 23.0% from compared to the first half of 2024.
  • ​The number of homes available at the end of June totaled 1.320 million, up 3.1% from May and is at their highest level since October 2020.
    • The current inventory, when combined with June’s sales pace, equates to 4.1 months of supply.
    • This is the highest months of supply since May 2020.

 

New home sales slipped again and are now down for the second consecutive month.

  • New home sales came in at a 617,000 unit rate in June, down 0.6% from May and down 7.4% from June 2023.
    • ​This was the lowest monthly sales rate since November 2022.
  • ​Through the first six months of the year, actual new sales are down 0.8% compared to the same period last year.
  • The inventory of unsold new homes ended June at 475,000 units, up 1.3% from May and up 9.7% from June 2023.
    • This is the highest month-end inventory level since February 2008.
    • The current inventory level, when combined with the June sales rate, equates to 8.9 months of supply.

 

 

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.