Market Update | September 13, 2023

 

PRICES PAID BY CONSUMERS INCREASED AT A FASTER RATE

Prices paid by consumers increased at a faster rate for the second consecutive month in August. The August CPI increased 0.44% from July and is up 3.67% from August 2022. The price increase for gasoline was the largest contributor to the monthly increase.

 

Input Costs

After recent sliding, zinc pricing held this week.

    • Zinc pricing held at $1.12/lb this week and has remained in a relatively tight range for the past month.

    • The average over the past 30 days is $1.08/lb.

 

Met coal pricing continued to push higher this week, climbing to $281/mt on the increased demand and tight supply.

    • This is up 4.3% from last week and is up over 11.5% from this time last month.

 

After initial expectations of slight decline, September prime scrap saw a much sharper decline.

    • September Chicago #1 busheling pricing declined $50/gt to $390/gt.
    • Shredded pricing was flat and is now in parity to prime.

 
 

Supply

U.S. raw steel production dropped again last week, now down for the third consecutive reading.

    • U.S. steelmakers produced 1.721 million tons at a 75.7% utilization rate, the lowest production rate in two months.
    • The drop last week came the Midwest region, which saw the largest week-over-week decline since April.
    • The current YTD utilization rate is at 76.0%, down 1.7% compared to the same time last year.

 

Preliminary total imports for September (11 days) were up slightly compared to the daily pace in August.

    • Flat rolled imports are coming in at a slightly faster rate as well compared to the daily pace in August.

 

 

DEMAND

Momentum from the non-residential construction sector continued to slow in August as the Dodge Momentum Index slipped again.

    • The Dodge Momentum Index (DMI) came in at 178.0, down from a revised July reading of 190.3.

    • The index has now slipped for three consecutive months and is at its lowest level since August of last year.
    • The DMI typically leads non-residential construction spending by 10-12 months.
    • Within the index, both the commercial building and institutional building components saw declines, sliding 1.6% and 14.8%, respectively.
    • The sharp drop from the institutional building component came from education, healthcare, and amusement.
    • The smaller decline from the commercial component was due to a sharp jump in planning from the hotel sector.

 

 

ECONOMIC

Prices paid by consumers increased at a faster rate for the second consecutive month in August.

    • The August CPI increased 0.44% from July and is up 3.67% from August 2022.

    • The price increase for gasoline was the largest contributor to the monthly increase.
    • The CORE CPI, excludes volatile food and energy prices, saw prices increase 0.23% from July and were up 4.35% from August 2022.
    • This is the lowest year-over-year increase since September 2021.
    • Over the past twelve months, the shelter index (+7.3%) accounted for over 70% of the total increase.
    • Other increases over the last year included motor vehicle insurance (+19.1), recreation (+3.5%), personal care (+5.8%) and new vehicles (+2.9%).

 

 

 

 

 

 

 

 

 

 

 

 

 

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.