Market Update | April 24, 2024

 

NEW ORDERS FOR MANUFACTURED DURABLE GOODS INCREASED IN MARCH

New orders for manufactured durable goods are up 2.6% from February and up for the second consecutive month. Excluding the volatile transportation component, new orders were up 0.2% compared to February. Nondefense new orders for capital goods (i.e. farm machinery and construction equipment) increased sharply, climbing 5.4% in March.

 

Input Costs

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

  • Zinc pricing came in at $1.27/lb this week, up from $1.26/lb previously and is near its highest level in a year.

 

Spot iron ore pricing rebounded again this week, climbing to $126/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 dropped sharply this week on the back of reports of ample supply.

  • The current coking coal pricing of $240/mt, down 4.9% from last week and down 2.0% from this time last month.

 

 

SUPPLY

After hitting a multi-month high three weeks ago, U.S. raw steel production declined for the second consecutive week.

    • U.S. steelmakers produced 1.716 million tons at a 77.3% utilization rate.
      • Production was down 0.6% from the prior week and down 3.0% from the same week last year.
      • YTD production is down 2.5% from the same timeframe last year.

 

Preliminary March carbon steel imports continued to climb, on a per day basis, and are now at their highest level since June.

    • March carbon steel imports totaled 1.975 million tons (63.7k tons/day), up 6.9% from February and up 1.1% from 1.954 million tons (63.0k tons/day) in March 2023.
    • Carbon flat rolled imports continued to push higher as well, climbing to 663,778 tons (21.4k tons/day) in March.
      • This is up 14.2% from February and up a sharp 46.5% from March 2023.
    • For Q1, total flat rolled imports are now up 34.2% compared to Q1 2023.
    • Within flat rolled, all three products increased from February, with hot rolled leading the way (34.0%).
      • Cold rolled and coated increased as well, climbing 13.2% and 19.4%, respectively.

 

 

DEMAND

Production of light vehicles in the U.S. continued to rebound in March and is now up for the third consecutive month.

    • U.S. light vehicle production totaled 946,314 units in March, up 0.9% from February but was down slightly (1.4%) from March 2023.
      • The year-over-year decline in March snapped a string of four consecutive months with year-over-year increases.
    • The increase in light truck production helped to overcome the decline in car production in March.
      • While light truck production increased 1.4% from February, car production dropped 1.9%.
    • For Q1 light vehicle production totaled 2.735 million units, up 5.8% compared to the Q1 total last year.

 

After falling in February, new home sales rebounded sharply in March.

    • March new home sales came in at a 693,000-unit rate, up 8.8% from February and up 8.3% from the 640,000-unit rate in March 2023.
      • This is the twelfth consecutive month in which sales increased on a year-over-year basis.
    • The inventory of unsold new homes at the end of February totaled 465,000 units, up for the third straight month and now at its highest level since October 2022.
      • Current inventory, combined with March’s sales pace, equates to 6.9 months of supply.
      • This is down from 8.0 months of supply in February and is at its lowest level since last May.
    • The median sales price jumped to $430,700, up from February but remained below the previous year level for the seventh straight month

 

New orders for manufactured durable goods increased in March, up 2.6% from February and now up for the second consecutive month.

    • Excluding the volatile transportation component, new orders were up 0.2% compared to February.
    • While new orders for primary metals declined, down 0.5% from February, fabricated metal product new orders increased 0.2%.
      • Non-defense new orders for capital goods (i.e. farm machinery and construction equipment) increased sharply, climbing 5.4% in March.
    • Unfilled orders for manufactured durable goods increased 0.4% from February and are now up for two consecutive months.
      • Transportation equipment drove the increase, climbing 0.7% from February.

 

 

 

 

 

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.