Market Update | December 13, 2023

 

REGULAR GALLON OF GAS HITS LOWEST AVERAGE PRICE ALL YEAR

A gallon of regular gasoline is going for $3.14 on average this week—the lowest it’s been all year and down from $3.87 in August. Smaller receipts at the pump go a long way toward keeping Americans’ cost of living at bay. Prices have been falling on lower demand from China and the U.S., coupled with more supply from increased stateside production. Enhanced extraction methods are helping the U.S. pump a near record number of barrels.

 

Input Costs

As the recent up and down movement for zinc continues, pricing remained virtually flat this week.

  • Zinc pricing came in at $1.105/lb this week, up from $1.103/lb previously and remains right near the 30-day average.

Spot iron ore pricing rebounded once again this week, climbing to $142/mt.

  • This is up 3.0% from the end of last week.

 

Pacific Basin met coal pricing held relatively steady this week, increasing slightly to $335/mt.

  • Current pricing is up 2.8% from the end of last week and is up 7.7% from this time last month.

 

December Chicago #1 busheling pricing saw a sharp jump from November, climbing $90/gt to $510/gt.

  • Prime scrap pricing is now up $120/gt over the last two months and is at its highest level since May.
  • For the year, Chicago busheling averaged $464/gt, down from $515/gt in 2022 and $575/gt in 2021.

 

Supply

US raw steel production declined slightly last week after hitting a five-week high previously.

    • US steelmakers produced 1.697 million tons at a 73.8% utilization rate.
      • Production last week was up 7.7% compared to the same week last year but YTD production is still down from the same time last year.

 

DEMAND

Shipments of heating and cooling equipment continued to slide in October, now down for the second consecutive month and for the third time in the last four months.

  • October HVAC equipment shipments totaled 1.566 million units, down 12.6% from September and down 11.7% from October 2022.
    • Shipments have now declined, on a y/y basis, in nineteen consecutive months.
    • This was​ the lowest monthly shipment total since April 2020.
  • ​Looking on a year-over-year basis, while water heater shipments saw an increase, it was not enough to overcome the sharp declines in both furnace and A/C & heat pump shipments.
    • Furnace and A/C & heat pump shipments declined 26.6% and 29.9%, respectively in October.
  • Year-to-date total shipments are now down 8.7% compared to the same timeframe last year.​​​

 

ECONOMIC

After months of sagging consumer confidence, waning inflation might be making the public more optimistic about what the future holds.

  • A recent University of Michigan survey showed that Americans have a more upbeat outlook about the economy and their own finances compared with last month and this time last year.

 

Prices paid by consumers declined, on an m/m basis, for the second consecutive month in November.

  • The November Consumer Price Index was down 0.2% from October but was up 3.14% from November 2022.
    • This was the slowest y/y growth rate since June and the second lowest since Q1 2021.
  • Prices for all goods, minus food and energy, increased slightly from October but grew at a slower y/y rate than previously.
    • The CORE-CPI increased 0.07% from October and was up 4.01% from
      November 2022.
    • This was the slowest y/y growth for the CORE-CPI since August​ 2021.
  • ​Over the last year, the shelter index was still up 6.5%, while vehicle insurance (+19.2%), recreation (+2.5%), personal care (+5.2%) and new vehicles (+1.3%) also saw increases.

 

A gallon of regular gasoline is going for $3.14 on average this week—the lowest it’s been all year and down from $3.87 in August.

  • Since driving a gas-guzzler is as American as apple pie, smaller receipts at the pump go a long way toward keeping Americans’ cost of living at bay.
  • Prices have been falling on lower demand from China and the US, coupled with more supply from increased stateside production.
    • Enhanced extraction methods are helping the US pump a near record number of barrels.

 

 

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.