Market Update | September 27, 2023

 

NEW HOME SALES CONTINUED TO SLIDE IN AUGUST

New home sales came in at a 675,000 unit rate, down 8.7% from July but up 5.8% from the 638,000 unit rate in August 2022. This is the fifth consecutive month in which sales increased on a year-over-year basis. The year-to-date actual new home sales is now up 1.7% compared to the same timeframe last year.

 

Input Costs

After holding flat last week, zinc pricing pushed higher this week.

  • Zinc pricing increased to $1.14/lb this week and has remained in a relatively tight range for the past month.
    • The average over the past 30 days is $1.12/lb.

 

Spot iron ore pricing increased slightly this week, climbing to $116/mt.

 

Met coal pricing continued to push higher this week, climbing to $326/mt on the increased demand and tight supply.

  • This is up 3.6% from last week and is up over 24.3% from this time last month.

 
 

Supply

U.S. raw steel production rebounded last week, climbing for the first time in a month.

  • U.S. steelmakers produced 1.735 million tons at a 76.3% utilization rate, the highest production rate in two months.
    • The current YTD utilization rate is at 76.0%, down 1.5% compared to the same time last year.

 

Preliminary total imports for September (25 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.

 

Total carbon steel imports continued to slide in August, hitting its lowest monthly total since February.

  • Carbon steel imports totaled 1.689 million tons in August, down from 1.746 million tons in July and down 10.2% from 1.880 million tons in August 2022.
  • Carbon flat rolled imports increased however, climbing 10.4% from July to 489,355 tons.
    • Flat rolled imports continued to be well below year-ago levels however, sliding 22.8% from 633,898 tons in August 2022.
    • While cold rolled imports declined on a month-over-month basis, both hot rolled and coated imports increased, climbing 17.7% and 18.3%, respectively.
    • While coated imports increased, hot-dipped galvanized imports were down slightly.

 

Global steel production continued to decline in August, now down for the fifth consecutive month.

  • Global steel production came in at a 4.923 million metric ton/day rate in August, down 3.7% compared to July and was at its lowest rate since December.
    • Production declined for both China and the rest of the world, seeing declines of 4.8% and 2.3%, respectively.
    • Production in China came in at a 2.787 million metric tons/day rate, its lowest daily rate since December.
  • North American production inched higher in August after sliding in July.
    • North American production came in at a 297,600 metric ton/day rate, up slightly from the 297,300 metric ton/day rate in July.
  • North American production came in at a 297,600 metric ton/day rate, up slightly from the 297,300 metric ton/day rate in July.

 
 

DEMAND

Sales of new homes continued to slide in August, now down for the second time in the last three months.

  • New home sales came in at a 675,000 unit rate, down 8.7% from July but up 5.8% from the 638,000 unit rate in August 2022.
    • This is the fifth consecutive month in which sales increased on a year-over-year basis.
    • The year-to-date actual new home sales is now up 1.7% compared to the same timeframe last year.
  • The current inventory of unsold new homes increased again, climbing to 443,000 units.
    • This is up 2.5% from July but were down 5.1% from last August.
  • The current inventory, when compared to August’s sales pace, equates to 8.3 months, the highest level since December.

 

 

ECONOMIC

Confidence among U.S. consumers waned in September as the Consumer Confidence Index sunk back below the key recession threshold.

  • The September U.S. Consumer Confidence Index came in at 103.0, down from the upwardly revised 108.7 reading in August.
    • Within the overall index, the present situation component increased slightly, climbing to 147.1 from 146.7, previously.
    • The expectations component, based on short-term outlook, declined to 73.7 in September.
    • This is down from 83.3 in August and is back below the key 80.0 recession indicator level.
    • The decline in the expectations component showed less confidence around future business conditions, job availability, and incomes.

 

 

 

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.