Market Update | April 10, 2024

 

PRICES PAID BY CONSUMERS CLIMB FASTER THAN EXPECTED

Prices paid by consumers continued to climb faster than market expectations. The March Consumer Price Index saw prices for all goods increase 3.48% compared to last year, the fastest increase since September. ​Within the overall CPI, both food and energy prices increased compared to year ago levels, climbing 2.2% and 2.1%, respectively. ​Compared to last March, the shelter component increased 5.7%, accounting for over 60% of the total increase.

 

Input Costs

Zinc pricing continued to push higher this week, now up for the second straight week.

  • Zinc pricing came in at $1.23/lb this week, up over $0.10/lb from $1.12/lb previously and is at its highest level in almost a year.

 

Spot iron ore pricing rebounded this week, climbing to $118/mt.

  • Rising inventories and low steel mill profitability in China, combined with weaker steel demand in 2024, have negatively impacted iron ore pricing.

 

Coking coal pricing continued to decline this week, sliding to the lowest level since August.

  • The current coking coal pricing of $224/mt, down 6.5% from last week and down 26.0% from this time last month.

 

April prime scrap pricing officially settled flat from March, with the Chicago regions holding at $420/gt.

  • The flat reading in April puts an end to the recent slide that saw pricing drop $90/gt over the previous two months.
  • Shredded pricing held steady as well, holding at $410/gt.

 

 

SUPPLY

U.S. raw steel production continued to climb last week and is now at its highest level since mid-August.

    • U.S. steelmakers produced 1.745 million tons at a 78.6% utilization rate.
      • Production was up 1.3% from the prior week and up 4.2% from the same week last year.
      • YTD production is essentially flat from the same timeframe last year.

 

Based on import licenses data, preliminary March imports increased 1.7% (on a daily basis) from February and were up 2.2% from the daily rate last March.

    • Flat products saw a sharp jump, climbing 16.8% from February and 4.2% from last March.

 

 

DEMAND

The Dodge Momentum Index, a leading indicator for nonresidential building projects, dropped sharply in March.

    • The March DMI came in at 164.0, down from 179.5 in February and 190.6 in March 2023.
      • ​This is the lowest the DMI has been since March 2022.
    • Within the overall index, both the commercial planning and institutional planning components dropped, sliding 3.2% and 17.2%, respectively.
    • The sharp drop in the institutional planning component was due to lower levels of education building planning.
      • Within the educational component, the drop was from life science and R&D laboratory projects.
    • On the commercial side, slower growth in office and hotel planning pulled down this component.

 

 

ECONOMIC

Prices paid by consumers continued to climb faster than market expectations.

    • The March DMI came in at 164.0, down from 179.5 in February and 190.6 in March 2023.
      • The March Consumer Price Index saw prices for all goods increase 3.48% compared to last year, the fastest increase since September.
        • ​Within the overall CPI, both food and energy prices increased compared to year ago levels, climbing 2.2% and 2.1%, respectively.
    • ​Prices for all goods, less food and energy, increased 3.80% compared to last year, up slightly from the two-plus year low seen in February.
    • Compared to last March, the shelter component increased 5.7%, accounting for over 60% of the total increase.
      • Other indexes with increased over the last twelve months include: auto insurance (22.2%), medical care (2.2%), and personal care (4.2%).

 

 

 

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.