Market Update | December 15th 2021



Nucor recently reached a deal acquiring 50% equity interest in California Steel Industries (CSI). The deal was reached from a subsidiary of Vale. They will also have a 1% equity ownership stake from JFE Steel Corp. Vale will receive $400 million cash from Nucor for the 50% stake.

Input Costs

Zinc pricing slipped to start the week; however, remaining above the 100 dma.

– Zinc pricing remained near $1.50/lb this week; however, longer-term forecasts expect pricing to return to the recent $1.40/lb-$1.45/lb average from the last 100 days.

Spot iron ore pricing continued to climb this week, jumping up to $108.25/dmt.

– Spot iron ore pricing is up 0.3% w/w and is up 21.4% m/m.

Pacific basin met coal pricing saw an increase this week on a pickup in demand from China and global weather related issues.

– Pricing rebounded to $339/mt, from the lowest level since early-September.

– Pricing is up 15.7% m/m and up +212% since the beginning of May.

U.S. imported pig iron prices slipped 2.7% from last week to $550/mt.

– Limited buying activity was the main reason attributed to the recent price decline.



After sliding the previous two weeks, domestic raw steel production increased last week.

– U.S. steelmakers produced 1.818 million tons at an 82.4% utilization rate.

– Year-to-date production is 19.4% above the total from the same period last year but is still 5.4% below the same timeframe in 2019.

Based on preliminary import license data, the daily average of imports during the first 13 days of December, are down 9.3% compared to the pace in November.

– Excluding Brazilian slabs, the daily average in December is down 2% from November.

Nucor reached a deal to acquire 50% equity interest in California Steel Industries (CSI) from a subsidiary of VALE and a 1% equity ownership stake from JFE Steel Corp.

– Nucor will pay cash to Vale of $400 million for the 50% stake.

The sharp increase in on order activity during the first eight months of the year, combined with the slower than trend shipment rate in November, helped to push carbon flat rolled inventory higher.

– Total carbon flat rolled inventory came in at a seventeen-month high of 4.379 million tons, up from 4.213 million tons in October but remains down nearly 300,000 tons from the recent peak of 4.692 million tons last April.

– When total inventory is combined with November’s shipment rate, the current inventory equates to 2.25 months of supply.

– This is up from 2.05 months in October and is well above last November’s level of 1.81 months.



Overall carbon flat rolled shipments from U.S. service centers declined on a month-over-month basis but were back above year ago levels.

– Total carbon flat rolled shipments declined to 1.946 million tons, down from 2.057 million tons in October but were up 2.2% from 1.904 million tons in November 2020.

– Shipments, on a tons/day basis, declined in October. Now sliding for the third consecutive month, slipping to 97.3 thousand tons/day.

– This is down from 98.0 thousand tons/day in October and remains below the 104.6 thousand tons/day average from the first half of the year.

Shipments of North American (U.S. and Canada) tractors and combines declined from October but remained above last year’s rate.

– Shipments totaled 20,146 units, down 43.1% from October but were up 7.6% from November 2020.

– This was the fifth consecutive month with a year-over-year increase in shipments.

– Year-to-date shipments remain 12.0% above the pace through November last year.

Business activity from the manufacturing sector continued to grow strongly in the New York region in December.

– The December Empire Manufacturing Index came in at 31.9, up from 30.9 in November and up sharply from 4.9 in December 2020.

– The two-month average of 31.4 is the highest in recent history.

– Any reading over 0.0 indicates growth in activity, while any reading below 0.0 denotes a contraction.

– ​​The new orders, shipments, and unfilled orders components all posted strong gains in December.

– One other positive in the report points to a potential recovery from the labor sector, as the employment component increased and the average workweek component expanded.

Confidence among U.S. homebuilders grew in December, now growing stronger for the fourth consecutive month.

– The December Housing Market Index came in at 84, up from 83 in November but down slightly from 86 in December 2020.

– ​Builder sentiment continued to increase despite the recent headwinds from inflation, supply-chain disruptions, and the continued labor shortage.



The expenditures component of the Cass Freight Index continued to climb in November and has yet again set an all-time high.

– The expenditure component, which measures total amount spent on freight, increased to 4.275.

– ​This is up 8.0% from October and up a sharp 44.0% from November 2020.

– Increased shipping activity, combined, more so, with climbing rates helped to push the component higher in November.

– The full year increase in spending will be 37% in 2021; which follows a 7% decline in 2020 and a flat reading in 2019.

– The inferred freight rates (spending divided by shipments) increased to a record high as well.​

Retail sales increased slightly in November, as it appears consumers are challenged to keep up with the rising prices.

– November retail sales came in at a $639.8 billion rate, up 0.3% from October and up a sharp 18.2% from a $541.2 billion rate in November 2020.

– ​This was the slowest month-over-month increase since July.

– ​The largest increases in sales in November came from gas stations, food & beverage stores, and bars & restaurants.

– These increases were nearly completely offset by declines in sales from department stores, electronic & appliance stores, and health & personal care 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.