Market Update | February 14, 2024

 

HVAC EQUIPMENT SHIPMENTS INCREASED IN DECEMBER

After sliding in the previous three months, shipments of HVAC equipment increased slightly in December, totaling 1.458 million units, up 0.9% from November. Shipments declined on a year-over-year basis however, sliding 11.5% from last December. This was the twenty-first consecutive month with a year-over-year decline.

 

Input Costs

Zinc pricing continued to drop this week, now hitting its lowest level since August.

• Zinc pricing came in at $1.04/lb this week, down from $1.09/lb previously and is now closing in on the 52 week low ($1.01/lb).

 

Spot iron ore pricing inched higher this week, climbing to $130/mt.

• Spot iron ore pricing is up 2.9% from last week but is down 1.5% since last month.

 

The February Chicago #1 busheling price settled at $480/gt, down $30/gt from January.

• This was the first m/m decline for Chicago prime scrap pricing since September.
  • Despite the pull back in February, Chicago prime scrap remains above the 2023 average ($464/gt) and the five-year average of $436/gt.
• Pricing in the NE Arkansas region slipped as well, sliding $20/gt to $460/gt.
• Weaker finished steel pricing and leaner order books helped to push scrap demand, and thus pricing, lower in February.

 

SUPPLY

U.S. raw steel production rebounded again this week and is now up for the second straight week.

• • U.S. steelmakers produced 1.710 million tons at a 77.0% utilization rate.

    • This is the highest weekly output since the middle of December.

 

U.S. preliminary steel import licenses for February (12 days) are up 14% compared to the same timeframe in January and follows a 17.4% increase in January.

• • Total licenses for flat rolled imports are down 0.8% compared to the same period in January.

 

Average domestic coated sheet lead times continued to narrow this week, sliding to 7.38 weeks.

• • This is down from 7.40 weeks previously and is at its tightest level since mid- August.

 

DEMAND

After sliding in the previous three months, shipments of HVAC equipment increased slightly in December.

• • December HVAC equipment shipments totaled 1.458 million units, up 0.9% from November.
    • Shipments declined on a year-over-year basis however, sliding 11.5% from last December.
    • This was the twenty-first consecutive month with a year-over-year decline.
  • Looking on a year-over-year basis, declines in shipments of furnaces and A/C & heat pumps overcame an increase in water heater shipments.
  • For the full year 2023, HVAC equipment shipments totaled 20.865 million units, down 9.3% compared to 2022.
    • This was the lowest annual total since 2019.

 

Shipments of North American (Canada and USA) tractors and combines continued to slide in January.

• • January shipments of tractors and combines totaled 12,787 units, down 44.2% from December and down 22.0% from January 2023.
    • Total shipments have now declined, compared to the same month of the prior year, in twenty-two of the last twenty-three months.
  • Shipments of both tractors and combines declined, on a year-over-year basis, in January, sliding 22.6% and 6.4%, respectively.
    • Tractor shipments totaled 12,212 units, the lowest monthly total (for any month) since February 2018.

 

ECONOMIC

Prices paid by consumers increased at their lowest annual rate, since June, in January.

• • The January Consumer Price Index increased 0.54% from December and was up 3.09% compared to January 2023.
    • While prices paid for food increased 0.4%, on a y/y basis, prices for energy declined 0.9%.
  • Prices paid for all goods, excluding food and energy increased 0.55% from December and were up 3.86% compared to January 2023.

    • This was the lowest year-over-year increase since May 2021.

  • While prices for shelter (+6.0%) made up most of the y/y increase, prices also increased for motor vehicle insurance (+20.6%), personal care (+5.3%), and recreation (+2.8%).
    • The index for used cars and trucks (-3.4%) and the index for apparel (-0.7%) were among those that decreased over the month.

 

Shipments of North American (Canada and USA) tractors and combines continued to slide in January.

• • January shipments of tractors and combines totaled 12,787 units, down 44.2% from December and down 22.0% from January 2023.
    • Total shipments have now declined, compared to the same month of the prior year, in twenty-two of the last twenty-three months.
  • Shipments of both tractors and combines declined, on a year-over-year basis, in January, sliding 22.6% and 6.4%, respectively.
    • Tractor shipments totaled 12,212 units, the lowest monthly total (for any month) since February 2018.

 

 

 

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.