Market Update | July 31, 2024

 

HDG PRICING INCREASED THIS WEEK

After sliding for fourteen consecutive weeks, HDG pricing increased this week. The increase from both HDG as well as HRC, helps to signal a bottoming of the recent downward pricing movement.

 

Input Costs

After dropping sharply last week, zinc pricing slipped again this week.

  • Zinc pricing dropped to $1.19/lb this week, and remains below the thirty-day average of $1.28/lb.

 

Spot iron ore pricing declined this week as well, sliding to $105/mt.

  • Iron ore pricing was down slightly 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 $216/mt, down 4.0% from last week and down 7.7% from last month.

 

After a flat reading in July, early expectations are for a strong sideways movement when it comes to the August prime scrap settlement.

  • Early expectations are for prime scrap to see at $10/gt – $20/gt boost.
  • This would be the first m/m increase since December.

 

 

SUPPLY

U.S. raw steel production slipped last week, after climbing to a seven-week high two weeks ago.

  • U.S. steelmakers produced 1.729 million tons at a 77.9% utilization rate.
    • Production was down 0.6% from the prior week but up 2.4% from the same week last year.
    • YTD production is down 2.1% from the same timeframe last year.

 

Preliminary flat rolled steel import licenses, for the first twenty-three days of July, were down 3.6% compared to the same period in June.

  • Hot-dipped galvanized import licenses are down sharply as well, sliding 10.2% compared to the first three weeks of June.

 

 

DEMAND

The economic health of the manufacturing sector in the Chicago region continued to contract in July.

  • The sector has now been in contraction for eight consecutive months and in twenty-one of the last twenty-two months.
  • The July Chicago PMI came in at 45.3, contracting at a faster rate than the 47.4 reading in June.
    • The three-month average came in at 42.7, up from June and is at its highest level since March.
    • Any reading below 50 shows contraction, while any reading above 50 shows expansion.
  • Within the components, four out of the five continued to decline.
    • Production led the decline, with new orders, order backlogs, and employment also falling.
    • The production component fell more than 8.0 points and is now at its lowest level since May.

 

 

ECONOMIC

Confidence among U.S. consumers increased in July but remains in the tight range that we have seen over the past two years.

  • The July Consumer Confidence Index came in at 100.3, up from a downwardly revised 97.8 reading in June.
  • The Present Situation component came in at 133.6, down from 135.3 previously.
  • The Expectations component, a short-term outlook, improved to 78.2.
    • This is up from 72.8 in June but still remains below that key 80.0 barometer.
  • Compared to last month, consumers were less pessimistic about future income but still uncertain about employment conditions.
    • When looking at big ticket purchases, the six-month average for plans to purchase a home fell to a 12-year low but plans to buy big-ticket appliances increased slightly.
    • Buying plans for cars were virtually flat compared to June.

 

 

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.