Market Update | February 28, 2024

 

SALES OF NEW HOMES INCREASED AGAIN IN JANUARY

Up for the second consecutive month, January new home sales came in at a 661,000 unit rate, up 1.5% from December and up 1.8% from the 649,000 unit rate in January 2023. New home sales have now increased, on a year-over-year basis, for ten consecutive months. Actual new home sales totaled 57,000 units in January, the highest monthly total since July. The number of new homes for sale at the end of January increased to 456,000 units, up on both a month-over-month and year-over-year basis. The current inventory, when combined with January’s sales pace, equates to 8.1 months of supply.

 

Input Costs

After rebounding last week, zinc pricing slipped to end the month.

• Zinc pricing came in at $1.06/lb this week, down from $1.08/lb previously and is still below the 30-day average.

 

Spot iron ore pricing was essentially flat, holding around $126/mt.

• Spot iron ore pricing is now down 1.5% since last month.
• Rising inventories and low steel mill profitability in China, combined with weaker steel demand in 2024, have negatively impacted iron ore pricing.

 

SUPPLY

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

• • US steelmakers produced 1.727 million tons at a 77.8% utilization rate.

    • This is the highest weekly output since the last week of September.

  • YTD production is down 1.5% from the same timeframe last year.

 

U.S. preliminary steel import licenses for February (25 days) are up 14% compared to the same timeframe in January and follows a 17.4% increase in January from December.

• • Total licenses for flat rolled imports are up 6.6% compared to the same periodin January.

 

Total carbon steel imports totaled 1.919 million tons in January, up 22.7% from December and up 2.8% from January 2023.

• • Total finished steel imports (ex. semi/slab) totaled 1.482 million tons, down 2.4% from last January.
  • Carbon flat rolled imports increased sharply, boosted by an increase in coated imports.
  • Carbon flat rolled imports totaled 602,255 tons, up 26.7% from December and up 23.3% from January 2023.
    • All three flat rolled products saw increases from December, with coated sheet imports climbing the most (50.3%), boosted by the highest monthly total of “other coated” product imports since July 2017.
    • Hot rolled and cold rolled sheet imports increased as well, climbing 2.4% and 21.6%, respectively.

 

DEMAND

Sales of new homes increased again in January and are now up for the second consecutive month.

• • January new home sales came in at a 661,000 unit rate, up 1.5% from December and up 1.8% from the 649,000 unit rate in January 2023.
    • New home sales have now increased, on a year-over-year basis, for ten consecutive months.
    • Actual new home sales totaled 57,000 units in January, the highest monthly total since July.
  • The number of new homes for sale at the end of January increased to 456,000 units, up on both a month-over-month and year-over-year basis.
    • The current inventory, when combined with January’s sales pace, equates to 8.1 months of supply.
  • The median sales price averaged $420,700 in January, down compared to the same month last year for the fifth straight month and for the ninth time in the last ten weeks.

 

New orders for manufactured durable goods declined again in January and are now down for the third time in the last four months.

• • January new orders declined 6.1% from December to a $276.7 billion rate.
    • Excluding the volatile transportation component, new orders were down 0.3% from December.
    • Nondefense new orders for capital goods declined a sharp 19.4% in January.
  • Unfilled orders were up again, climbing 0.2% from December 20 a $1.396 trillion rate.
    • Unfilled orders are now up for the thirteenth time in the last fourteen months.
  • Inventories increased as well, climbing for the sixth consecutive month.

 

ECONOMIC

Confidence among US consumers declined in February after seeing increases in the previous three months.

• • The February Consumer Confidence Index came in at 106.7, down from a revised 110.9 in January.
  • The Present Situation component came in at 147.2, down from 154.9 in January.
  • The Expectations component declined as well, slipping to 79.8 from 81.5 previously.
    • On a six-month basis, buying plans for autos, homes, and big-ticket appliances dipped slightly.
  • While concerns over inflation remain, an increase in concern around the labor market and the US political environment helped to push the overall index lower.

 

The second estimate for Q4 GDP showed annual growth of 3.2%, down slightly from the initial growth estimate of 3.3%.

• • The second estimate reflects a downward revision to inventory investment.
    • This downward revision was partly offset by upward revisions to state and local government spending and consumer spending.
  • The increase in GDP reflected increases in consumer spending, exports, state and local government spending, non-residential spending, federal government spending, and residential investment.
    • These increases were partly offset by a decline in inventory investment.
    • Imports, which are a subtraction for GDP, increased.

 

 

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.