Market Update | October 25, 2023

 

NEW HOME SALES REBOUNDED SHARPLY IN SEPTEMBER

After sliding in August, new home sales rebounded sharply in September and are now up in two of the last three months. New home sales came in at a 759,000 unit rate in September, up 12.3% from August and up 33.9% from the 567,000 unit rate in September 2022. September had the highest sales rate since February 2022. This is now the sixth consecutive month in which sales increased on a year-over-year basis.

 

Input Costs

After slipping slightly last week, zinc pricing rebounded this week as buying activity returned.

  • Zinc pricing increased to $1.11/lb this week but has remained in a relatively tight range for the past month.
    • The average over the past 30 days is $1.12/lb.

 

Iron ore pricing rebounded this week on the back of a new round of stimulus announcements from China.

  • Spot iron ore pricing came in at $119/mt, up 3.0% from the start of the week.

 

Met coal pricing slipped again this week, sliding $344.50/mt on weak demand from China.

  • This is down 5.9% from last week but is up 6.3% from this time last month.

 

 

Supply

US raw steel production increased slightly week, after sliding the previous three weeks.

  • US steelmakers produced 1.703 million tons at a 74.1% utilization rate.
  • The current YTD utilization rate is at 75.8%, down 1.0% compared to the same time last year.

 

After sliding the previous two months, global steel production increased in September.

  • Global production came in at a daily rate of 4.977 million metric tons, up 1.1%
    from August but was down 1.6% from the 5.056 million metric tons/day rate in September 2022.

    • This was the first month with a year-over-year decline since May.
  • Chinese production was down 1.8% from August and is now down for three consecutive months and for the fourth time in the last five months.
      • ​Chinese production slipped to a 2.737 million mt/day rate, the lowest since December.
  • ​US production slipped slightly month-over-month, sliding (1.1%) to a 223k mt/day rate.

 

DEMAND

After sliding in August, new home sales rebounded sharply in September and are now up in two of the last three months.

  • New home sales came in at a 759,000 unit rate in September, up 12.3% from August and up 33.9% from the 567,000 unit rate in September 2022.
    • September had the highest sales rate since February 2022.
    • This is now the sixth consecutive month in which sales increased on a year-over-year basis.
  • While sales were increasing in September, so was inventory, which is now up for the fourth time in the last five months.
    • The inventory of unsold new homes increased to 441,000, the highest​ level since December.
  • The current inventory, when combined with September’s sales pace, equates to 7.3
    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.