PRICES PAID BY CONSUMERS CONTINUED TO CLIMB IN JUNE
Prices paid by consumers continued to climb in June but increased at its lowest rate since March 2021. Prices increased 0.32% from May and were up 2.97% compared to the same month last year. The index for shelter was the largest contributor to the all-item increase, accounting for over 70% of the increase. Prices for motor vehicle insurance was also a large contributor.
After inching higher last week, zinc pricing slipped slightly this week, now down for the second time in the last three weeks.
Zinc pricing came in at $1.07/lb this week, down from $1.09/lb last week but has remained in a relatively tight range for the past month.
Spot iron ore pricing has rebounded over the last week on the back of increased buying by China.
- Spot iron ore pricing is currently at $114/mt, up $1/mt from last week but still down over 2.5% from the start of the year.
July Chicago #1 busheling came in at $440/gt, down $30/gt from June.
- Chicago busheling has now slipped $90/gt over the past two months.
- #1 busheling pricing in the NE Arkansas region was flat, holding at $460/gt.
- The recent construction/closing of a few locks on the Mississippi River helped keep scrap generated in the manufacturing heavy North/Midwest landlocked and kept supplies down river leaner.
U.S. raw steel production dropped for the second consecutive week last week.
- U.S. steelmakers produced 1.711 million tons at a 75.2% utilization rate: slipping to its lowest weekly output since mid-April.
- The current YTD utilization rate is at 75.8%, down 2.7% compared to the same time last year.
- SDI Sinton has suffered an unplanned outage that will likely keep the furnace offline throughout the remainder of July.
- SDI noted that the issue was with the caster shear, but others are reporting foundation issues that could be a longer-term issue.
- The Sinton facility is rated to produce ~8,200 tons/day, however since start up it has not achieved full production for a sustained period.
Preliminary total imports for July (10) were down 19.4% compared to the same daily pace in June.
- Carbon HDG imports are coming in at a 15.8% decline compared to the daily pace in June.
- While still early in the month, July HDG imports are coming in at their lowest rate in more than a decade.
Dealer inventory of light vehicles continued to climb in June, now up for the second consecutive month.
June light vehicle inventory ended the month at 1.905 million units, up 5.0% May.
- Light vehicle inventory was up sharply on a year-over-year basis, climbing 55.8% from 1.223 million units in June 2022.
- The largest increase in June came from cars, which were up 9.2% from May.
- Light truck and imported vehicle inventory increased as well, climbing 3.8% and 8.2%, respectively.
- The current inventory, when combined with June’s sales pace, equates to 36 days of supply, still well below the historical average of 65 days.
Negotiations between the UAW and Detroit automakers kicked off officially this week as the current agreement expires in mid-September.
The industry is bracing for contentious talks as the UAW President has vowed to be aggressive in bargaining.
- Any sort of disruption at the auto production level will be a huge negative impact for sheet steel demand.
May carbon flat rolled consumption came in at a rate of 148.9 thousand tons/day, down slightly from the 149.8 thousand tons/day rate in April but is up from the 145.1 thousand tons/day rate from last May.
This was the second straight year-over-year increase after nearly a year of declines.
- Per/day coated flat rolled consumption increased for the fourth time in the last five months and was at its highest monthly rate since last August.
- May was up 0.7% from April to a 54.8 thousand tons/day rate, however, was down 2.7% from the 56.3 thousand tons/day rate in May 2022.
The Dodge Momentum Index, a leading indicator for non-residential construction, slipped slightly in June after a sharp jump in May.
The June DMI came in at 197.3 from the revised 202.4 reading in May.
- The sharp 10.5% decline in the institutional component overcame the 3.1% increase in the commercial component.
- Despite the decline in June, the index remained well above the level from June last year.
- Increased interest rates and tightening lending standards continued to negatively impact the sector during the back half of the year.
Prices paid by consumers continued to climb in June but increased at its lowest rate since March 2021.
Prices increased 0.32% from May and were up 2.97% compared to the same month last year.
- The index for shelter was the largest contributor to the all-item increase, accounting for over 70% of the increase.
- Prices for motor vehicle insurance was also a large contributor.
- Prices for all goods, excluding food and energy, increased 4.8% over the last 12 months, the lowest growth since October 2021.
- The index for shelter increased 7.8% compared to last year.
- Other increased compared to last June include vehicle insurance, household furniture, new vehicles.
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.