Market Update | March 6, 2024

 

U.S. LIGHT VEHICLE SALES REBOUNDED IN FEBRUARY

U.S. light vehicle sales totaled 1.248 million units, up 16.6% from January and up 9.6% from 1.139 million unit rate in February 2023. Sales have now increased, on a year-over-year basis, for nineteen consecutive months. This was the highest February sales total since 2020.

 

Input Costs

After a slight decline last week, zinc pricing rebounded to kick off the new month.

  • Zinc pricing came in at $1.11/lb this week, up from $1.06/lb previously and is still below the 30-day average.

 

Spot iron ore pricing softened a little, slipping to $121/mt.

  • Rising inventories and low steel mill profitability in China, combined with weaker steel demand in 2024, have negatively impacted iron ore pricing.

 

Coking coal pricing declined slightly this week to $251/mt.

  • This is down 1.6% from last week and down 3.5% from this time last week.

 

SUPPLY

After climbing the previous four weeks, U.S. raw steel production declined this week.

    • U.S. steelmakers produced 1.716 million tons at a 77.3% utilization rate.
    • YTD production is down 1.7% from the same timeframe last year.

 

U.S. average coated lead times extended slightly this week after hitting a 52-week low last week.

    • Average coated lead times increased to 7.18 weeks, on the back of a boost to lead times for EAF producers.

 

DEMAND

After slowing in January, U.S. light vehicle sales rebounded in February.

    • U.S. light vehicle sales totaled 1.248 million units, up 16.6% from January and up 9.6% from 1.139 million unit rate in February 2023.
      • Sales have now increased, on a year-over-year basis, for nineteen consecutive months.
      • This was the highest February sales total since 2020
    • The daily rate increased to 43,018 units/day, up from 34,528 units/day in January.
    • While still early in the year, YTD light vehicle sales are up 6.0% compared to the first two months of 2023

 

Despite the increase in February sales, dealer inventories ended the month higher than in January.

    • U.S. light vehicle inventory totaled 2.499 million units, up 4.1% from January and up 43.7% from February 2023.
      • This is the highest month-end inventory level since February 2021.
    • While inventory of both light trucks and imports increased, car inventory declined from January.
    • The current light vehicle inventory, when combined with February’s sales rate, equates to 50 days of supply.
      • This is down from 56 days in January and remains well below the long-run average of 67 days.

 

 

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.