Market Update | June 7, 2023

 

U.S. LIGHT VEHICLE INVENTORIES INCREASED SLIGHTLY IN MAY

May inventories totaled 1.814 million units, up 0.9% from April and up 60.4% from 1.150 million units in May 2022. The continued recovery in auto production rates has helped dealers start to rebuild their depleted inventories. The current inventory levels, when combined with May’s sales pace, equates to 33 days of supply.

 

Input Costs

After sliding the previous four weeks, zinc pricing is up slightly this week.

    • Zinc pricing came in at $1.05/lb this week, up from $1.04/lb last week but still near its lowest level in more than two years.

    • SDI announced new lower zinc coating extras yesterday, effective July 3rd.
    • The overage average decline is roughly 10%.

 

Spot iron ore pricing has rebounded over the last week on the back of increased buying in China.

    • Spot iron ore pricing is currently at $108.20/mt, up over $10.00/mt from last week but still down over 5% from the start of the year.
    • Iron ore pricing is back above $1.00/mt after slipping below that level, the first time since around the Thanksgiving holiday, last week.

 

A slight increase in buying interest from China helped overcome the decreased demand in India which helped push coking coal pricing higher this week.

    • Coking coal pricing currently sits at $230/mt, up 3.6% from last week but down 4.3% from a month ago.
    • Coking coal pricing is still down 41.0% from the recent peak seen in mid-February.

 

 

Supply

U.S. raw steel production continued to move higher last week, climbing to its highest weekly output since last August.

    • U.S. steelmakers produced 1.754 million tons at a 78.0% utilization rate, topping 76% for the sixth straight week.
    • The current YTD utilization rate is at 75.5%, down 3.3% compared to the same time last year.

 

Preliminary import licenses for May (29 days) showed overall steel imports declined 10.0% from April on a daily average.

    • Import licenses for flat products are pushing higher however, climbing almost 20% from the two-plus year low seen in April.

 

Average domestic coated flat rolled lead times expanded slightly this week after narrowing to a fifteen-week low last week.

    • The current average of 7.00 weeks is only up slightly from the 6.95 week average last week.

 

DEMAND

After declining in April, U.S. light vehicle inventories increased slightly in May.

    • May inventories totaled 1.814 million units, up 0.9% from April and up 60.4% from 1.150 million units in May 2022.

    • The continued recovery in auto production rates has helped dealers start to rebuild their depleted inventories.
    • Inventory of both cars and light trucks increased in May, climbing 3.3% and 0.9%, respectively.
    • The current inventory levels, when combined with May’s sales pace, equates to 33 days of supply.
    • This is down from 34 days in April and is at its lowest level since September.

 

 

 

 

 

 

 

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.