Market Update | March 8, 2023

 

MOST DOMESTIC MILLS MOVE TO INQUIRE ONLY ON COATED SHEET LEAD TIMES

Domestic coated sheet lead times continued to push higher this week as most mills have moved to inquiry only. The current average lead time, for coated product, increased to 8.1 weeks, up from 7.8 week previously. This is the longest lead times have been since early April last year.

 

Input Costs

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

    • Zinc pricing came in at $1.36/lb this week, down from $1.40/lb previously and remains near its lowest level since the start of the year.

 

Continued recovery in steel demand from China has helped to push spot iron ore pricing higher, currently trading at $127.50/mt.

    • This is up slightly from last week and is up nearly 20% over the last 90 days.
    • China’s total iron ore imports over the Jan/Feb timeframe were up nearly 8.0% from the same timeframe last year.

 

Met coal pricing rebounded slightly this week, climbing to $366.00/mt after the sharp decline last week.

    • This week’s price is up from last week’s reading of $360.00/mt.

 

 

Supply

After climbing last week, U.S. raw steel production declined this week.

    • U.S. steelmakers produced 1.664 million tons at an 74.4% utilization rate.
    • Production continues to remain in the tight range between 74.0% – 75.0% utilization.
    • Despite the recent bump higher, YTD production is down 5.4% compared to last year.

 

Preliminary February import licenses, (27 days), showed carbon flat rolled imports are down 30% from the same time in January.

    • Coated import licenses are showing the lowest import level since November.

 

Domestic coated sheet lead times continued to push higher this week as most mills have moved to inquiry only.

    • The current average lead time, for coated product, increased to 8.1 weeks, up from 7.8 week previously.
    • This is the most extended lead times have been since early April last year.

 

 

DEMAND

After a sharp drop in January, the Dodge Momentum Index rebounded slightly in February.

    • The DMI came in at 203.0 in February, up 1.9% from 199.3 in January and was up over 26% from last February.

    • The DMI is a leading indicator for nonresidential building projects 9-12 months in the future.

    • Both the commercial and institutional components increased in February, climbing 1.4% and 2.9%, respectively.

    • The commercial component was boosted by growth in office construction planning.
    • The institutional component was boosted by education and healthcare projects.
    • The continued growth in the DMI gives hope of continued construction activity growth moving into 2024.

 

 

 

 

 

 

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.