Market Update | April 19, 2023
CONFIDENCE AMONG HOMEBUILDERS IMPROVED FOR THE FOURTH CONSECUTIVE MONTH IN APRIL
The April Housing Market Index came in at 45, up slightly from 44 in March but well below the 77 from April 2022. The lack of resale inventory only partly offset negative impacts from high interest rates and increased building material costs. Within the HMI, both the current condition component and the sales expectation component increased.
After hitting a 6+ month low last week, zinc pricing rebounded slightly this week.
Zinc pricing came in at $1.30/lb this week, up from last week but is still 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 $131.80/mt, up slightly from last week and up nearly 3% from last month and up 16.5% over the last 90 days
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 $265/mt, down 7.2% from last week and down 22.1% from a month ago.
U.S. raw steel production increased slightly last week, climbing for the second consecutive week.
- U.S. steelmakers produced 1.687 million tons at an 75.0% utilization rate.
- YTD production is down 4.4% compared to the same time last year.
Preliminary March import licenses, (18 days), showed carbon flat rolled imports are down 13.8% from the same time in March.
- Coated import licenses are up from February, as the daily rate in March is up 4.5%.
Business activity in the New York region continued to decline in March.
The index has now declined for eight consecutive months and for the tenth time in the last eleven months.
The March Empire Manufacturing Index came in at -24.6, down nearly 20 points from February.
- The two-month average came in at -15.2, a slightly slower decline than the -19.4 average in February
- The New Order and Shipments components continued to decline, sliding to -21.7 and -13.4, respectively.
- While still contracting, the Unfilled Order component declined (-6.7) at a slower rate than in February (-9.2).
Confidence among homebuilders improved for the fourth consecutive month, in April.
- The April Housing Market Index came in at 45, up slightly from 44 in March but well below the 77 from April 2022.
- Any reading over 50 indicates a positive outlook, while any reading below 50 is negative.
- The lack of resale inventory only partly offset negative impacts from high interest rates and increased building material costs.
- Within the HMI, both the current condition component and the sales expectation component increased, climbing to 51 and 50, respectively.
- The traffic component was flat at 31 in April.
After a sharp increase in February, new housing starts slipped slightly in March and are now down for the sixth time in the last seven months.
- New housing starts came in at a 1.420 million unit rate, down 0.8% from February and down 17.2% from March 2022.
- The decline in starts came from multi-family units, while single-family starts increased for the second consecutive month.
- Year-to-date starts are now down 17.9% compared to Q1 2022.
- Permits, an indicator of future construction, slipped as well in March.
- Permits came in at a 1.413 million unit rate, down 8.8% from February and down 24.8% from March 2022.
The Cass Information Linehaul Index continued to slide in March, now down for the tenth consecutive month
The Linehaul Index came in at 147.7, down 0.6% from February and down a sharper 9.6% from March 2022.
The index is now down 12.1% from the all-time high of 168.1 seen in May 2022.
The Linehaul Index is a broad market indicator, that includes both spot and contract freight.
- With spot rates already down sharply from the previous year’s high, contract rates (which are a larger share of the market) are likely to continue to slide lower.
- The Linehaul Index tracks market fluctuations in per-mile truckload pricing.
- The index isolates the linehaul component from other components such as fuel and accessories.
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.