Market Update | January 18, 2023

 

MILL PRICING INCREASE TO START THE WEEK

Cleveland Cliffs announced new increased pricing to start the week, raising prices $50/st from their previous level. This is the third increase during the current upward cycle for Cliffs, raising prices $160/st since the end of November. The latest increase pushes HRC pricing to $800/st.

 

Input Costs

As the recent up and down movement for zinc continues, pricing increased for the second consecutive week.

    • Zinc pricing came in at $1.49/lb this week, up from #1.43/lb previously and topped $1.50/lb, mid-week, for the first time in a month.

 

Spot iron ore pricing was virtually flat this week, climbing slightly to $121.50/mt.

    • This is up 0.5% from the end of last week and is up 11.3% on a m/m basis.

 

Met coal pricing was flat as well this week, ending the week at $311.00/mt.

    • This is down 0.9% from the end of last week but is still up 20.7% from this time last month.

 

 

Supply

U.S. raw steel production inched higher last week after sliding the three previous weeks.

    • U.S. steelmakers produced 1.602 million tons at an 71.7% utilization rate.
    • Compared to the same week last year, production was down 7.7% .

 

Cleveland Cliffs announced new increased pricing to start the week, raising prices $50/st from their previous level.

    • This increase is the third during this upward cycle for Cliffs, raising prices $160/st since the end of November.
    • The latest increase pushes HRC pricing to $800/st.

 

 

DEMAND

Business activity from the manufacturing sector in the New York region contracted sharply in January.

    • The January Empire Manufacturing Index came in at -32.9, down from -11.2 in December.

    • The index has now been below 0.0 for the fifth time in the last six months.

    • Any reading below 0.0 shows a contraction in activity, while a reading above 0.0 shows expansion.
    • This is the lowest reading since the deepest part of the pandemic.
    • Both the new orders and shipment components showed sharp declines, sliding to -31.1 and -22.4, respectively.
    • The index for future business conditions was flat, holding at 8.0, as both new orders and shipments are expected to rise slightly over the next six months.

 

Industrial Production slowed in December and is now down for the second consecutive month.

    • The December Industrial Production Index came in at 103.4, down 0.7% from November but was still up 1.6% from December 2021.

    • The manufacturing component fell 1.3%, with declines seen nearly across all sectors.
    • Within durable good manufacturing, nearly all sectors saw declines of at least 1.0%, with the largest declines seen in machinery and wood products.
    • While the industrial production index remains above its long-run average, capacity utilization fell below that average in December.
    • The Capacity Utilization rate declined as well in December, sliding 1.0% to 77.5%.

 

North American (Canada/USA) tractor and combine shipments increased sharply in December but still remain well below year ago levels.

    • Shipments totaled 23,912 units, up 46.3% from November but down 16.3% compared to 28,573 units shipped in December 2021.

    • This is the tenth consecutive month to see a decline in year-over-year shipments.
    • The drop in shipments, on a year-over-year basis, solely came from tractors, which were down 17.3%.
    • Combine shipments continued to climb however, increasing 18.2% compared to December 2021.
    • For the full year 2022, total shipments were down 10.5% compared to 2021.

 
 

ECONOMIC

Sales at U.S. retail and food establishments declined in December, now down for the second consecutive month.

    • December retail sales came in at a $677.1 billion rate, down 1.1% from November, but was up 6.0% from a $638.7 billion rate in December 2021.

    • For the full year 2022, total sales were up 9.2% compared to 2021.
    • While sales increased slightly in building material stores and sporting good stores, it was not enough to overcome declines from nearly all other types of businesses.
    • The largest declines in December came from department stores, gas stations, furniture stores, and online retailers.

 

 

 

 

 

 

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.