TOTAL CARBON STEEL CONSUMPTION HIGHER IN JUNE
Strong imports, combined with increased shipments from domestic producers, helped to overcome an increase in exports to push total carbon steel consumption higher in June. Per/day domestic carbon steel consumption climbed to an eleven-month high but was still slightly lower than year-ago levels for the thirteenth consecutive month. June carbon flat rolled consumption came in at a rate of 152.3 thousand tons/day, up from the 148.9 thousand tons/day rate in May and is up from the 142.8 thousand tons/day rate from last June.
After climbing higher last week, zinc pricing slipped this week after climbing four times in the last five weeks.
Zinc pricing came in at $1.11/lb this week, down from $1.17/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 $116/mt, down $5/mt from last week but now down ~2.5% 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 declined last week after climbing in the three prior weeks.
- U.S. steelmakers produced 1.727 million tons at a 75.9% utilization rate: sliding to its lowest level in three weeks.
- The sharp drop this week came from the Southern region, which saw production decline by 30,000 tons alone.
- The current YTD utilization rate is at 75.9%, down 2.2% compared to the same time last year.
Domestic coated lead times pushed higher on average this week, climbing to 8.27 weeks.
- This is up from 7.82 weeks last week and at its highest level since early July.
- The increase this week came from converters and coaters and both integrated and mini-mill producer lead times were essentially flat.
- The four-week average of 8.28 weeks, is the highest level since the first week of April
Preliminary total imports for July were down 1.6% compared to the same daily pace in June.
- Flat rolled imports are coming in at a 5.9% decline compared to the daily pace in June.
The Dodge Momentum Index (DMI), declined 0.9% in July to 193.4 from the revised June reading of 195.1.
Compared to June, the commercial component of the DMI remained relatively flat, ticking down 0.2%, while the institutional component fell 1.9.
- The biggest declines, compared to June came from hotel planning, education project planning, and healthcare project planning.
- Since the start of the year, commercial planning activity is down 10% through July, while institutional planning is up 16%.
- Moving forward throughout the back half of 2023, commercial activity is poised to be slightly slower than in the first half of 2023.
- Tighter lending standards, higher interest rates, and labor shortages will negatively impact activity.
Strong imports, combined with increased shipments from domestic producers, helped to overcome an increase in exports to push total carbon steel consumption higher in June.
Per/day domestic carbon steel consumption climbed to an eleven-month high but was still slightly lower than year-ago levels for the thirteenth consecutive month.
- June carbon flat rolled consumption came in at a rate of 152.3 thousand tons/day, up from the 148.9 thousand tons/day rate in May and is up from the 142.8 thousand tons/day rate from last June.
- This was the third straight year-over-year increase after nearly a year of declines.
- Per/day coated flat rolled consumption slipped slightly after climbing recently, slipping 0.8% to a 54.4 thousand tons/day rate.
- June was down 3.1% from the 56.1 thousand tons/day rate in June 2022.
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.