Core Report | October 25, 2024
Domestic sheet pricing has been trading in a tight range for the past four months. While that trend has continued of late, U.S. Steel/Big River Steel made a move to push pricing higher.
Domestic sheet pricing has been trading in a tight range for the past four months. While that trend has continued of late, U.S. Steel/Big River Steel made a move to push pricing higher.
U.S. light vehicle production slipped in September, now sliding for the third time in the last four months. U.S. light vehicle production totaled 894,643 units, down 7.2% from August, but was up 3.3% from 866,338 units in September 2023. This was the first year-over-year increase for light vehicle production since April. Year-over-year production for light trucks was up 6.6%, helping to overcome the 13.4% year-over-year decline in car production. Car production has now declined on a year-over-year basis for the seventh consecutive month. Year-to-date light vehicle production is now up 2.2% compared to the same timeframe last year.
Domestic raw steel production rebounded slightly last week after scheduled maintenance outages lowered production the week prior.
After sliding in the previous four months, shipments of tractors and combines increased slightly in September. Shipments totaled 19,265 units, up 0.8% from August but still down sharply, 20.7%, from September 2023. This is the sixteenth consecutive month in which shipments declined on a year-over-year basis. The increase in September came from tractor shipments, which increased 1.4% from August, but were down 19.7% from last year. Combine shipments were down 15.8% from August and down 42.6% from September 2023. The year-to-date shipments are down 7.3% compared to the same timeframe last year.
After slipping in July, shipments of HVAC equipment rebounded in August. August HVAC equipment shipments totaled 2.049 million units, up 2.0% from July and up 6.1% from August 2023.
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.
Domestic raw steel production had the largest week-over-week decline since 2020 last week as mills continue maintenance outages. U.S. mills produced an estimated 1,646k tons at a 74.1% utilization rate; this is down from 1,707k tons and a 76.9% rate previously. This is the lowest utilization rate and tonnage output since January 2023.
Dockworkers have started walking out of every major port on the East and Gulf coasts of the U.S., kicking off a strike that may ripple through the economy. The current strike is impacting activity at 36 domestic ports from Maine to Texas. The ports impacted by the industrial action have the combined capacity to handle as much as half of all U.S. trade volumes, and the strike will halt container cargo and auto shipments.
Coking coal pricing increased sharply this week, now up for the second consecutive week. Coking coal settled at $204.75/mt, up from $187.50/mt last week. This is up 13.75% over the last two weeks. Steelmakers in India have been building up stocks in anticipation of rising domestic demand, and in China, mills were stockpiling coal ahead of the upcoming Golden Week and anticipated stimulus demand.
A recent report by the Department of Transportation noted that after nearly three years into the five-year law, 40% of Infrastructure Investment and Jobs Act funds have been announced, indicating that potential upside to demand remains. Much of the law’s funding is available until expended, so it is expected to fuel construction projects past the five-year period. However, other funds are appropriated in specified amounts for specified fiscal years from 2022 to 2026. Former President Donald Trump has indicated he would defund some initiatives, such as clean energy programs, if he’s elected. The recent report showed that over 60,000 construction projects are advancing with IIJA money.