HOUSING SHORTAGE RELIEF MAY BE ON THE WAY
According to the recent new housing starts report, 420,000 new apartments are forecast to be built in the U.S. this year. U.S. home prices have soared to unrealistic levels lately, in part due to a severe housing shortage. After the start of the new housing construction boom last year, this would be the first time since 1972 in which more than 400,000 apartments were built in back-to-back years. As one would expect, the top spot for new apartments in 2022 is the New York metro area.
The recent up and down movement for zinc continued this week, as pricing eased from its recent highs.
Spot iron ore pricing slipped this week, now down for the second consecutive week.
Pacific Basin met coal pricing climbed for the second consecutive week, rebounding back above $270/mt.
Domestic raw steel production increased slightly last week, now up for only the third time in the last eight weeks.
- U.S. steelmakers produced 1.756 million tons at a 79.7% utilization rate.
- YTD production is now down 3.3% from the same time last year.
Based on preliminary import licenses in August (22 days), the daily average imports were flat m/m (-7.1% y/y).
- Excluding slabs, daily avg imports were up 6.4% m/m.
U.S. Steel has scheduled two small maintenance outages between September and October:
- A 30-day maintenance outage at its No. 3 blast furnace at Mon Valley, starting Sept 1, expected to reduce output by roughly 100,000 tons.
- A 7-day outage at its Big River Steel mill, starting October 23 and affecting roughly 60,000 tons.
Global steel production continued to soften in July, now sliding for the third consecutive month.
- July global steel production came in at a 4.815 million metric ton/day rate, down 9.0% from June and down 6.5% from a 5.152 million metric ton/day rate in July 2021.
- This is the lowest daily rate since November and has now declined, on a year-over-year basis, for twelve consecutive months.
- The big drop in July came from China, which saw production sliding 13.1% from June to a 2.627 million metric ton/day rate in July.
- Production throughout the rest of the world declined as well, sliding 3.4% to a 2.189 million metric ton/day rate in July.
- This is the lowest production for the world (ex. China) since September 2020.
- Year-to-date actual global steel production is down 5.3% compared to the same timeframe last year.
After climbing the previous two months, U.S. light vehicle production dropped sharply in July.
U.S. production totaled 644,229 units in July, down 23.6% from June but still up 4.5% from July last year.
Production has now increased, on a year-over-year basis, for the fourth consecutive month.
- This was the lowest monthly production total since July last year.
- Production of both cars and light trucks declined sharply, sliding 25.7% and 23.1%, respectively.
- Despite the sharp drop from last month, year-to-date light vehicle production was still up 4.8% compared to the same timeframe last year.
Limited inventory combined with rising prices and interest rates, helped to push new homes lower once again in July.
July new home sales came in at a 511,000 unit rate, down 12.6% from June and a sharp 29.6% from a 714,000 unit rate in July 2021.
This is the lowest sales rate, for new homes, in six-and-a-half years.
- While climbing of late, the inventory of new homes for sales, remains relatively low at 466,000 units.
- However, when compared with July’s sales rate, the months of supply came in at 11.2.
- This is the highest level since January 2009.
- The median sales price increased in July, climbing to $439,400 and ending a streak of two consecutive declines.
- Year-to-date actual new home sales are now down 15.7% compared to the same timeframe last year.
U.S. home prices have soared to unrealistic levels lately, in part due to a severe housing shortage, but relief might be on the way.
According to the recent new housing starts report, 420,000 new apartments are forecast to be built in the U.S. this year.
After the start of the new housing construction boom last year, this would be the first time since 1972 in which more than 400,000 apartments were built in back-to-back years.
- As one would expect, the top spot for new apartments in 2022 is the New York metro area.
The U.S. dollar continued to strengthen against a backet of foreign currencies this week, of particular note, against the EURO.
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.