Market Update | April 12, 2023
PRICES PAID BY CONSUMERS COOLED FURTHER
While still climbing in March, this was the lowest, year-over-year, increase for prices since April 2021. The March Consumer Price Index saw a 0.33% increase from February and a 4.98% from March 2022. The shelter index was by far the largest contributor to the monthly increase, more than offsetting the decline in energy. Other indexes with increases are vehicle insurance, furniture, recreation, and new vehicles.
Zinc pricing continued to slide this week and is now at its lowest level since October.
Zinc pricing came in at $1.25/lb this week, down from last week and is down sharply from the $1.60/lb peak seen in November.
After the run up over the previous three months, spot iron ore pricing has remained steady over the past couple of weeks.
- Spot iron ore pricing is currently at $129.4/mt, up slightly from last week and up nearly 3% from last month and up 16.5% over the last 90 days
- The decline in pricing was due to higher shipments, weaker than expected steel demand, and lingering concerns about the government taking actions against hoarding and speculative activities.
A wave of new supply, combined with a weaker demand environment has helped to push coking coal pricing lower as of late.
- Coking coal pricing currently sits at $286/mt, down 2.1% from last week and down 21.2% from a month ago.
After climbing in the previous four months, prime scrap pricing held steady in April.
- Prime scrap pricing held steady at $550/gt, still up sharply from the bottom ($335/gt) seen in November.
U.S. raw steel production increased slightly last week, after sliding the previous two weeks.
- U.S. steelmakers produced 1.675 million tons at an 74.4% utilization rate.
- YTD production is down 4.3% compared to the same time last year.
Preliminary March import licenses, (27 days), showed carbon flat rolled imports are up 5.8% from the same time in February.
- Coated import licenses are up as well from February, as the daily rate in March is up 4.5%.
February carbon flat rolled consumption came in at a rate of 140.9 thousand tons/day, up from a 132.3 thousand tons/day rate in January but remains below the 150.1 thousand tons/day rate from last February.
Despite the year-over-year decline, this was the highest daily consumption rate since June.
Per/day coated flat rolled consumption increased for the second consecutive month after sliding for the four previous months, climbing 7.7% to a 54.1 thousand tons/day rate.
- February was down 7.3% from the 58.4 thousand tons/day rate in February 2022.
- While non-residential spending continued to climb, the sharper drop in residential spending pulled overall spending lower.
- Non-residential spending increased 0.4% from January and is now at a new all-time high.
- Residential spending slipped for the ninth consecutive month and is at its lowest rate since December 2021.
- Non-residential spending now accounts for 53.3% of the total spend, the highest percentage since November 2020.
North American (Canada and U.S.) tractor and combine shipments slipped again in February, now down for the second consecutive month.
- Shipments totaled 16,314 units, down 0.5% from January and down 16.1% from February 2022.
- This is the twelfth consecutive month in which shipments were down on a year-over-year basis.
- While shipments of combines increased, the decline in tractor shipments helped pull the overall total lower.
- Tractor shipments were at their lowest monthly total since February 2020.
- Year-to-date shipments are down 13.1% from the first two months of 2022.
While still climbing in March, the prices paid by consumers cooled further.
The March Consumer Price Index saw a 0.33% increase from February and a 4.98% from March 2022.
This was the lowest, year-over-year, increase for prices since April 2021.
The shelter index was by far the largest contributor to the monthly increase, more than offsetting the decline in energy.
- The CORE-CPI, all items minus food and energy, saw a 5.59% yearly increase in March, up slightly from February and now virtually flat over the last three months.
- Over the last twelve months, the shelter index saw a 8.2% increase, accounting for over 60% of the increase.
- Other indexes with increases are vehicle insurance, furniture, recreation, and new vehicles.
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.