Market Update | October 9, 2024

 

U.S. RAW STEEL PRODUCTION DECLINED SHARPLY

U.S. raw steel production declined sharply again last week, now down for the fourth straight week. U.S. steelmakers produced 1.606 million tons at a 72.3% utilization rate, the lowest weekly output since the last week of December 2022. Weekly output has dropped by more than 100k tons in just two weeks. Production was down 2.4% from the prior week and down 5.4% from the same week last year. YTD production is down 1.7% from the same timeframe last year. Additionally, based off preliminary import license data, total steel imports are tending 2.4% below the rate from the same timeframe (6 days) in September.

 

PRICE

Domestic flat rolled pricing remained in a tight range this week as the recent supply outages have balanced out a weaker demand environment.

  • The trade cases, stronger scrap pricing, leaner service center inventory, and upcoming mill outages are still providing upward momentum for pricing.

 

Input Costs

Zinc pricing slipped this week, slipping after three consecutive increases.

  • Zinc pricing slipped to $1.40/lb this week, down slightly from the 20-month high last week.

 

Spot iron ore pricing slipped this week, sliding to $110/mt from $112/mt previously.

Coking coal pricing rebounded this week, climbing to $185/mt from $170/mt last week.

  • Prices continued to be weighed down by tepid buying interest as demand from Indian reportedly is still sluggish due to adverse weather conditions.

 

SUPPLY

U.S. raw steel production declined sharply again last week, now down for the fourth straight week.

  • U.S. steelmakers produced 1.606 million tons at a 72.3% utilization rate, the lowest weekly output since the last week of December 2022.
    • Weekly output has dropped by more than 100k tons in just two weeks.
    • Production was down 2.4% from the prior week and down 5.4% from the same week last year.
  • YTD production is down 1.7% from the same timeframe last year.

 

Based off preliminary import license data, total steel imports are tending 2.4% below the rate from the same timeframe (6 days) in September.

  • Despite the slight decline from the September rate, the current October pace is up 5.1% compared to the same timeframe in 2023.
  • Year-to-date imports are now up 2.7% compared to the same timeframe last year.

 

DEMAND

After climbing for five consecutive months, the Dodge Momentum Index slipped in September.

  • The September DMI came in at 208.6, down from a revised 217.7 reading in August.
  • The drop in September came from commercial planning, which declined by 7.8%.
    • The drop in commercial planning came from a slight moderation in planning for data center activity.
    • Hotels are one of the few sectors that improved in September and have seen increased activity over the past five months.
  • Institutional planning improved, however, climbing by 5.2% from August.
    • The education, healthcare and recreational projects were the primary drivers of expansion in September.
    • These increases were only partly offset by a decline in planning for religious projects.
  • Despite the slight decline in September the index remains at very high levels.

 

Despite the combination of higher domestic mill shipments and increased imports, total carbon steel consumption slipped in August.

  • Total carbon steel consumption (steel shipments + imports – exports) came in at a per/day rate of 260.0 thousand tons in August, down from 260.8 thousand tons/day in July and down 3.8% from 270.1 thousand tons/day in August 2023
  • August carbon flat rolled consumption came in at a rate of 144.9 thousand tons/day, up from the 142.3 thousand tons/day rate in July and is up 1.8% from the 144.7 thousand tons/day rate from last August.
    • The year-over-year increase in August restarted a streak that ended after a fourteenth months of year-over-year increases in June.
    • YTD carbon flat rolled consumption is now up 4.0% compared to the same timeframe last year.
  • Per/day coated flat rolled consumption rebounded in August, climbing after two consecutive month-over-month declines. Coated consumption increased 6.0% to a 58.2 thousand tons/day rate.

 

 

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.