Market Update | April 16, 2025

 

SHIPMENTS OF HVAC EQUIPMENT CONTINUED TO CLIMB ON A MONTH-OVER-MONTH BASIS

February HVAC shipments totaled 1.700 million units, up 1.9% from January but were down 1.5% compared to the 1.727 million unit total in February 2024. This was the second consecutive month in which shipments were down on a year-over-year basis. Looking at a year-over-year basis, to help smooth seasonality, shipments of both water heaters and A/C & heat pumps declined in February. These declines outweighed a sharp increase, of 20.7%, in furnace shipments. The year-to-date shipments are now down 1.1% compared to the same timeframe last year.

 

PRICE

Domestic sheet pricing was mixed once again this week as both cold-rolled and hot-dipped galvanized pricing softened while hot-rolled coil pricing inched higher.

  • General uncertainty about future pricing direction and demand has led to a pause in buying activity over the past few weeks.
    • This pause has led to a slight softening in pricing for all products.

 

Input Costs

Zinc pricing was flat this week as global demand is in question due to the current trade situation.

  • Pricing held at $1.18/lb this week, slightly below the ten-day average of $1.20/lb.

 

Spot iron ore pricing rebounded this week but remains in the very tight range we have seen for the past six weeks.

  • The current price is $1.07/mt, up from the sub $1.00/mt reading last week.

 

Met coal pricing rebounded this week as supply disruptions in Australia continued.

  • The current pricing of $183/mt is up 3.4% from last week and is now up 5.2% from this time last month.

 

SUPPLY

U.S. raw steel production rebounded last week after dropping the previous week.

  • U.S. steelmakers produced 1.689 million tons at a 75.2% utilization rate: up from 1.656 million tons previously.
  • Production is up 2.0% from last week but was down 2.1% from the same week last year.
  • YTD production is down 1.3% from the same timeframe last year.

 

 

DEMAND

Shipments of HVAC equipment continued to climb on a month-over-month basis but were down from last year.

  • February HVAC shipments totaled 1.700 million units, up 1.9% from January but were down 1.5% compared to the 1.727 million unit total in February 2024.
    • This was the second consecutive month in which shipments were down on a year-over-year basis.
  • Looking at a year-over-year basis, to help smooth seasonality, shipments of both water heaters and A/C & heat pumps declined in February.
    • These declines outweighed a sharp increase, of 20.7%, in furnace shipments.
  • The year-to-date shipments are now down 1.1% compared to the same timeframe last year.

 

Business activity in the manufacturing sector, in the New York region, continued to contract in April, albeit at a slower rate than in March.

  • The April Empire Manufacturing Index came in at -8.1, an improvement from the -20.0 reading in March.
    • Any reading below 0.0 shows a contraction in activity, while any reading above 0.0 shows an expansion.
  • Both the shipment and new order components continued to slow, coming in at -8.8 and -2.9, respectively.
    • The unfilled order component expanded, however, climbing over 6.0 to 4.1.
  • Looking forward, respondents grew more pessimistic as the index for future business conditions fell 20 points to -7.4.
    • The index is now down 44.0 over the past three months.
  • The index for future capital spending slowed but was still positive at 1.6.

 

Industrial production slipped in March as warmer-than-normal temperatures negatively impacted the index for utilities.

  • March industrial production came in at 103.9, down from 104.2 in February.
    • Despite the decline in March, industrial production increased at an annual rate of 5.5% in Q1.
  • While the overall index slipped, the manufacturing index increased 0.3% from February.
    • Within manufacturing, the production of durable goods increased by 0.6%.
    • The increase in durable goods output was led by motor vehicle and aerospace production.
  • Overall capacity utilization slipped to 77.8%, down 0.4% from February.
    • Utilization for manufacturing inched higher, climbing to 77.3% in March.
    • Despite the increase, the rate was still 0.9% below the 50-year average.

 

While improving slightly from March, overall confidence from U.S. homebuilders continued to slide in April.

  • The April Housing Market Index came in at 40, up slightly from 39 in March but well below the 51 reading in April 2024.
    • Any reading below 50 shows increased pessimism, while any reading above 50 shows an optimistic outlook.
  • While the present situation component improved slightly to 45, the outlook for the next six months declined at a faster rate by sliding to 43.
    • The traffic component, which has been below 50 for four straight years, improved by 1 point to 25.
  • Increased material costs, uncertainty around the economy, and continued labor volatility, has negatively impacted confidence of late.

 

ECONOMIC

U.S. retail sales increased again in March, climbing 1.4% from February and were up 4.6% from March 2024.

  • Total sales came in at a $734.9 billion rate, a fresh all-time high.
  • For Q1, total sales were up 4.1% compared to Q1 2024.
  • Compared to February, sales from motor vehicles & part dealers saw the biggest increase, climbing 5.3%.
    • Other sectors to see strong increases include building material & garden stores, sporting goods stores, and bars/restaurants.
  • These increases helped to overcome declines from gas stations and department stores.

 

 

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.