Market Update | December 7, 2022

 

CAR DEALER LOTS CONTINUE TO REPLENISH

Inventory of light vehicles continue to replenish as production has improved during the back half of the year. Inventory is now up for the fourth consecutive month and is at its highest level since April 2021. While improving, inventory remains well below the 5-year pre-pandemic average of 3.788 million units. The current inventory, when combined with November’s sales pace, equates to 37 days of supply.

 

Input Costs

As the recent up and down movement for zinc continues, pricing rebounded this week after sliding last week.

    • Zinc pricing came in at $1.45/lb this week, up from $1.33/lb previously and is at its highest level since mid-September.

 

Spot iron ore pricing rebounded sharply once again this week, climbing to $109.70/mt.

    • This is up 8.3% from the end of the last week and is up 27.4% on a m/m basis.

 

Pacific Basin met coal pricing held relatively steady this week, increasing slightly to $257/mt.

    • Current pricing is up 4.3% from the end of last week but is down 19.7% from this time last month.

 

 

Supply

U.S. raw steel production increased slightly last week after hitting a two-plus year low previously.

    • U.S. steelmakers produced 1.630 million tons at an 73.1% utilization rate.
    • Production last week was down 9.5% compared to the same week last year and YTD production is now down 5.5% from the same the last year.

 

Based on preliminary import license data, the daily average for November shows flat rolled steel imports were down 5.0% compared to October.

    • Hot-dipped galvanized import licenses showed a 9.3% declined compared to October.

 

 

DEMAND

Inventory of light vehicles on dealers’ lots continue to replenish as production has improved during the back half of the year.

    • U.S. light vehicle inventory ended November at 1.645 million units, this is up 6.9% from October and up 57.0% from 1.047 million units in November 2021.

    • Light vehicle inventory is now up for the fourth consecutive month and is at its highest level since April 2021.

 

While improving, inventory remains well below the 5-year pre-pandemic average of 3.788 million units.

    • Compared to October, the inventory of cars increased the most, climbing 9.0%.
    • Light truck and imported vehicle inventory increased as well, climbing 6.8% and 6.0%, respectively.

 

The current inventory, when combined with November’s sales pace, equates to 37 days of supply.

 

 

 

 

 

 

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.