Market Update | June 26, 2024

 

SALES OF NEW HOME DECLINED SHARPLY IN MAY

The May new home sales came in at a 619,000 unit rate, down 11.3% from April and down 16.5% from the 741,000 unit rate in May 2023. This was the first year-over-year decline since March 2023. The inventory of new homes for sale increased to 480,000, up from 466,000 in April and is at its highest total since January 2008. The current inventory, when combined with May’s sales pace, equates to 8.6 months of supply. The median sales price declined slightly to $417,400, down from $417,9000 in April.

 

PRICE

The continued imbalance of supply and demand is allowing buyers to limit purchases and cause pricing to continue to slide lower.

 

 

 

Input Costs

After sliding the previous two weeks, zinc has now rebounded for two consecutive weeks.

    • Zinc pricing came in at $1.30/lb this week, up from $1.27/lb previously.

 

Spot iron ore pricing rebounded slightly this week, climbing by $4/mt to $111/mt.

    • Iron ore pricing is near its lowest level in more than six weeks on worries over the outlook for Chinese demand.

 

Coking coal pricing declined this week on the back of increased supply.

    • The current coking coal pricing of $252/mt, down 1.6% from last week but up 0.4% from last month.

 

 

 

SUPPLY

US raw steel production inched higher last week, after sliding the previous two weeks.

    • US steelmakers produced 1.710 million tons at a 77.0% utilization rate.
      • Production was up 0.4% from the prior week but down 3.0% from the same week last year.
      • YTD production is down 2.8% from the same timeframe last year.

 

May preliminary carbon steel imports totaled 2.204 million tons, up 7.4% from April and up a sharp 29.6% from May 2023.

    • This is the highest monthly total for carbon imports since June 2022.
    • Carbon flat rolled imports increased as well, climbing to 687,452 tons, up 0.8% from April and up 34.6% from 510,934 tons in May 2023.
      • While both hot rolled and cold rolled imports declined from April, they could not overcome the sharp increase in coated sheet imports.
    • Coated sheet imports were up 19.7% from April and up 70.1% from May 2024.
      • On a daily rate, HDG imports (8.44k tons/day) were at their highest daily rate since March 2022.
    • Year-to-date carbon flat rolled imports are now up 41.3% compared to the first five months of 2023.

 

 

 

DEMAND

After climbing the previous two months, sales of new home declined sharply in May, sliding to the lowest monthly rate since November.

    • May new home sales came in at a 619,000 unit rate, down 11.3% from April and down 16.5% from the 741,000 unit rate in May 2023.
      • This was the first year-over-year decline since March 2023.
    • The inventory of new homes for sale increased to 480,000, up from 466,000 in April and is at its highest total since January 2008.
      • The current inventory, when combined with May’s sales pace, equates to 8.6 months of supply.
    • The median sales price declined slightly to $417,400, down from $417,900 in April.

 

 

 

ECONOMIC

Confidence of the U.S. consumer slowed slightly in June after seeing a strong increase in May.

    • The June Consumer Confidence Index came in at 100.4, down slightly from the 101.3 reading in May.
    • Within the overall index, the present situation component came in at 141.5, up from 140.8 previously.
    • However, the expectations component, a short-term outlook, fell to 73.0, down from 74.9 in May.
      • The expectations component has been below 80 (a level which usually signals a recession ahead) for five consecutive months.
    • Continued strength in the current labor market continued to outweigh concerns about future income and business 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.