Market Update | September 11, 2024

 

THE DODGE MOMENTUM INDEX CONTINUED TO PUSH HIGHER IN AUGUST

Now up for the fifth consecutive month, the August DMI came in at 220.4, up from a revised 214.2 reading in July and up sharply from the 178.0 reading in August 2023. This is the highest reading since December 2022, coming in just below that all-time high level. The August DMI was boosted by both planning for commercial and institutional projects. While commercial planning increased by 1.9%, institutional planning increased by 5.7% from July.

 

PRICE

Domestic flat rolled product pricing inched higher this week but remains in a tight range.

  • The trade cases, stronger scrap pricing, and upcoming mill outages are still providing upward momentum to pricing.

 

Input Costs

Zinc pricing slipped this week, now down for the second consecutive week.

  • Zinc pricing slipped to $1.24/lb this week, right at the 10-day and 30-day averages.

 

Spot iron ore pricing dropped sharply this week, sliding to $91/mt from $100/mt previously.

  • Iron ore pricing is now at its lowest since November 2022.

 

Coking coal pricing declined further this week, declining to $180/mt.

  • Current pricing is down 8.2% from last week and is now down 16.1% from this time last month.
  • Prices continued to be weighed down by tepid buying interest as demand from India reportedly is still sluggish due to adverse weather conditions.

 

September prime scrap pricing settled flat across all regions after initial expectations were for a slight decline.

  • Chicago prime pricing settled at $380/gt, holding at the level for the fourth consecutive month.

 

SUPPLY

US raw steel production rebounded last week, after slipping during the previous week.

  • US steelmakers produced 1.772 million tons at a 79.8% utilization rate.
    • Production was up 0.7% from the prior week and up from the same week last year.
    • YTD production is down 1.8% from the same timeframe last year.

 

DEMAND

The Dodge Momentum Index continued to push higher in August, now up for the fifth consecutive month.

  • The August DMI came in at 220.4, up from a revised 214.2 reading in July and up sharply from the 178.0 reading in August 2023.
    • This is the highest reading since December 2022, coming in just below that all-time high level.
  • The August DMI was boosted by both planning for commercial and institutional projects.
    • While commercial planning increased by 1.9%, institutional planning increased by 5.7% from July.
  • Expected upcoming rate cuts, moderating inflation, and an expected modest upgrade to consumer demand have helped increase planning activity for most non residential sectors.

 

The combination of higher domestic mill shipments and limited exports helped to push total carbon steel consumption higher in July.

  • Total carbon steel consumption (steel shipments + imports – exports) came in at a per/day rate of 260.8 thousand tons in July, up from 260.4 thousand tons/day in June but down 1.9% from 266.0 thousand tons/day in July 2023.
  • July carbon flat rolled consumption came in at a rate of 142.3 thousand tons/day, down from the 146.1 thousand tons/day rate in June but is up 0.4% from the 141.7 thousand tons/day rate from last July.
    • The year-over-year increase in July restarted a streak that ended after a fourteenth month with a year-over-year increase in June.
    • YTD carbon flat rolled consumption is now up 4.1% compared to the same timeframe last year.
    • Per/day coated flat-rolled consumption declined in July, sliding for the second consecutive month after hitting its highest daily rate since April 2022 in May.

 

ECONOMIC

Prices paid by US consumers increased by 2.53% compared to last August, the lowest annual increase since February 2021.

  • Within the overall index prices for food increased 2.1%, while energy prices dropped 4.0%.
  • Excluding food and energy, the CORE-CPI increased 3.20% on an annual rate, up slightly from the 3.17% annual increase in July.
    • The shelter index increased 5.2% in August, accounting for over 70% of the total 12- month increase.
    • Other indexes with increases over the past year include motor insurance, medical care, recreation, and education.
    • These increases overcame the declines seen in prices for used vehicles, airline fares, and new vehicles.

 

 

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.