Market Update | September 4, 2024

 

TOTAL CONSTRUCTION SPENDING SLIPPED IN JULY

Total construction spending slipped in July, sliding for the first time since January. Total spending came in at a $2.163 trillion rate, down 0.3% from June, but was still up 6.7% from the $2.027 trillion rate in July 2023. Despite the continued year-overyear increase, this was the lowest increase since May 2023. Spending on both residential and non-residential projects declined in July, sliding 0.4% and 0.2%, respectively. This was the second consecutive month in which spending on nonresidential projects declined. Total non-residential spending was at its lowest rate since February.

 

PRICE

Domestic flat rolled product pricing remained virtually flat once again this week.

Despite the slight decline from CRU and flat reading from Nucor, pricing has remained in a very tight range over the past 6-8 weeks.

 

Input Costs

Zinc pricing slipped this week after climbing the previous five weeks.

  • Zinc pricing slipped to $1.29/lb this week, still above both the 10 day and 30 day averages.

 

Spot iron ore pricing rebounded this week, climbing to $109/mt from $103/mt previously.

  • Iron ore pricing was down slightly from last week and is currently trending between the 30 and 90 day averages.

 

Coking coal pricing held steady this week, holding at $196/mt.

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

 

 

SUPPLY

U.S. raw steel production declined last week, after climbing in the three previous weeks.

  • U.S. steelmakers produced 1.760 million tons at a 79.2% utilization rate.
    • Production was up 1.0% from the prior week and up from the same week last year.
    • YTD production is down 2.0% from the same timeframe last year.

 

 

DEMAND

Total construction spending slipped in July, sliding for the first time since January.

  • Total spending came in at a $2.163 trillion rate, down 0.3% from June, but was still up 6.7% from the $2.027 trillion rate in July 2023.
    • Despite the continued year-over-year increase, this was the lowest increase since May 2023.
  • Spending on both residential and non-residential projects declined in July, sliding 0.4% and 0.2%, respectively.
    • This was the second consecutive month in which spending on non-residential projects declined.
  • Total non-residential spending was at its lowest rate since February.
    • The largest declines came from the commercial sector, lodging, and religious buildings.

 

Economic activity in the manufacturing sector continued to contract in August, remaining in that territory for the fifth consecutive month.

  • The August ISM Manufacturing Index improved slightly from July but was still below the key 50.0 level at 47.2.
    • The twelve-month average slipped slightly, falling to 48.1 from 48.2 previously.
  • In August, the 2.8-point drop in the new order component was one of the biggest contributing factors to the weak overall reading.
    • The new order component has now been in contraction for five consecutive months.
  • The production component slipped as well, falling to 44.8 from 45.9, previously.
    • The backlog of orders increased from July, rising nearly 2,0 points to 43.6, but remaining well below expansion.

 

 

 

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.