Market Update | August 16, 2023



Shipments of heating and cooling equipment increased in June, now up for the second consecutive month and for the fourth time in the last five months. June HVAC equipment shipments totaled 2.003 million units, up 2.5% from May but were still down 9.9% from June 2022.


Input Costs

After climbing recently, zinc pricing dropped for the second consecutive week.

    • Zinc pricing came in at $1.05/lb this week, down from $1.11/lb last week but has remained in a relatively tight range for the past month.


Spot iron ore pricing has slipped over the last week on the back of declined buying by China.

    • Spot iron ore pricing is currently at $107/mt, down $5/mt from last week but now down ~4.0% from the start of the year.


After sliding the previous three months, prime scrap pricing, in the Chicago region, settled flat in August.

    • Chicago #1 busheling pricing stayed at $440/gt.
    • Despite the recent slide, the current price remains well above the three-year average that preceded COVID ($320/gt).



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

    • U.S. steelmakers produced 1.737 million tons at a 76.4% utilization rate after dropping below 76% for the first time in two months two weeks ago.
    • The current YTD utilization rate is at 75.9%, down 2.1% compared to the same time last year.


It was reported this week that US Steel turned down an offer from Cliffs to sell for roughly a $7.4 billion value.

    • US Steel mentioned that they will continue to evaluate all offers before deciding.
    • No matter the outcome, this has potential for further domestic sheet production consolidation and further discipline when it comes to pricing.
    • Esmark has also emerged as a possible suitor as they have let it be known that they have made an offer similar to Cliffs.


Preliminary total imports for August (14 days) were up slightly compared to the daily pace in July.

    • Flat rolled imports are coming in at a slightly faster rate as well compared to the daily pace in July.




Shipments of heating and cooling equipment increased in June, now up for the second consecutive month and for the fourth time in the last five months.

    • June HVAC equipment shipments totaled 2.003 million units, up 2.5% from May but were still down 9.9% from June 2022.

    • This is the fifteenth consecutive month in which shipments declined on a year-over-year basis.
    • Looking on a year-over-year basis, to help smooth seasonality, shipments of both furnaces and A/C & heat pumps saw declines, sliding 33.7% and 14.5%, respectively.
    • Water heater shipments increased however, climbing 11.7% compared to last June.
    • Year-to-date shipments are now down 10.3% compared to the first half of 2022.


Business activity, from the manufacturing sector in the New York region, declined sharply in August after expanding slowly the previous two months.

    • The August Empire Manufacturing Index came in at -19.0, down sharply from 1.1 in July.

    • Any reading below 0.0 indicates a decline in activity, while any reading above 0.0 shows expansion.
    • Both the new order and shipment components declined sharply in August, sliding to -19.9 and -12.3, respectively.
    • The unfilled orders component declined as well, at a slightly slower rate than in July however.
    • The index for future business conditions rose six points to 19.9, its highest level in more than a year, suggesting firms have become more optimistic about future conditions.



Confidence among U.S. homebuilders was neutral in August, after expanding the previous two months.

    • The August Housing Market Index came in at 50.0, down from 56.0 in July.

    • Any reading over 50.0 indicates increased optimism, while any reading below 50.0 denotes pessimism.
    • All three components slowed in August but both the present and next six month components remained in optimism territory.
    • The present situation and next six month outlook came in at 57 and 55, respectively.
    • The traffic component slowed further, slipping to 34 from 40 previously.




The shipment component of the Cass Freight Index declined, sliding 2.2% from June.

    • The index was down 8.9% on a year-over-year basis, which followed a 4.7% decline in June.

    • The shipment component has now been down for nineteen months, still below the 24 month average from the previous three down cycles.
    • The expenditure component declined as well, sliding 0.9% from June and a sharp 17.0% from July 2022.
    • The expenditure component measures the total spend on freight, including fuel.
    • The inferred freight rate declined a sharp 17.0% from July last year.
    • The inferred freight rate is total spent (expenditure) per truckload (shipment).
    • The current freight rate was at its lowest level in two years.


Retail sales continued to climb in July, now up for the fourth consecutive month.

    • July retail sales came in at a $696.4 billion rate, up 0.7% from June and up 3.2% from July 2022.

    • Excluding the volatile gas sector, total sales were up 5.8% from last July, the largest year-over-year increase since January.
    • The largest increases in July came from sporting good stores, online retailers, and building material & garden supply stores.
    • These increases helped overcome declines from auto dealers, furniture stores, electronic 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.