Market Update | January 3, 2024

 

DOMESTIC MILL ANNOUNCES PRICE INCREASE TO START OFF THE NEW YEAR

Cleveland Cliffs started off the new year with an increase announcement for current spot market base prices on all carbon hot rolled, cold rolled, and coated steel products. This increase is effective immediately with all new orders. Cliffs set a new minimum base price for hot rolled steel of $1,150/st.

 

 

Input Costs

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

  • Zinc pricing came in at $1.19/lb this week, up from $1.17/lb previously and remains slightly above the 30-day average.

 

Spot iron ore pricing was virtually flat again this week, holding around $140/mt at $143/mt.

  • This is about 2% from the end of last week.

 

Pacific Basin met coal pricing declined this week, sliding to $325/mt.

  • Current pricing is down 0.8% from the end of last week and is down 0.7% from this time last month.

 

 

PRICE

Cleveland Cliffs started off the new year with a price increase for current spot market base prices on all carbon hot rolled, cold rolled, and coated steel products.

    • This increase is effective immediately with all new orders.
    • Cliffs set a new minimum base price for hot rolled steel of $1,150/st.

 

 

SUPPLY

U.S. raw steel production declined for the second consecutive week.

    • U.S. steelmakers produced 1.680 million tons at a 73.1% utilization rate.
      • For the full year 2023, U.S. production was 88.7 million st, up 0.2% from 2022.

 

Preliminary December imports (25 days) increased sharply compared to November, climbing about 15% mtd.

    • An increase in December would stop a string of five consecutive monthly declines.
    • HDG sheet imports are on pace for a 10% m/m increase.

 

 

DEMAND

Total construction spending continued to climb in November and is now up for the eleventh consecutive month.

    • Total spending came in at a $2.050 trillion rate, up 0.4% from October and is up 11.3% from the $1.842 trillion rate in November 2022.
    • November total spending is at an all-time high and marks the fourth consecutive month topping $2.0 trillion.
      • Spending in November was boosted by spending on residential projects, which climbed 1.0% to a $907.4 billion rate.
      • The increase in residential spending helped overcome a 0.1% decline in nonresidential spending.
      • The m/m decline in non-residential spending was the first decline since July 2022.
    • Within non-residential spending, privately funded spending increased 0.2%, while publicly funded projects declined by 0.6%.

 

Economic activity in the manufacturing sector contracted in December, although at a slower rate that in November.

  • The ISM Manufacturing Index came in at 47.4, up slightly from the 46.7 reading in both October and November.
  • Despite the slight improvement, the index remained in contraction for the fourteenth consecutive month.
    • Any reading below 50 denotes contraction, while any reading above 50 shows expansion.
  • The one bright spot within the index was the production component, which improved back into expansion at 50.3.
    • The new order component slipped again however, sliding to 47.1 and remaining in contraction for the sixteenth straight month.
  • The backlog of orders component improved to 45.3 but remained in contraction once again.

 

 

 

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.