INFLATION DOWN SLIGHTLY FROM MARCH’S 40+ YEAR HIGH

The April consumer price index came in at 289.1, up 8.26% from last April. Although this is still elevated, it is lower than March’s all-time high of an 8.54% year-over-year increase. Airline fares saw the largest 1-month increase in history. Prices also continued to rise for housing, lodging away from home, and new vehicles. There were a few components that saw slight declines in pricing including apparel, communication, and used vehicles.

 

Input Costs

After sliding last week, zinc pricing saw another decline this week.

• • Zinc pricing is currently at $1.65/lb., however this is still an elevated level.

 

Spot iron ore pricing fell back this week, sliding to $128.10/mt.

• • Spot iron ore pricing is now down 14.9% m/m and 44.2% below prior year levels.
  • Spot iron ore pricing remains near its lowest level since late January.

 

Pacific basin met coal pricing was virtually flat this week, holding at $519.50/mt.

• • While flat from last week, pricing is up 15.4% from this time last month and 377% from this time last year.

 

The national average price of diesel shot up sharply again this week to a fresh all-time high.

• • The current national average is $5.62/gallon, up from $5.50/gallon previously.
  • This is the ninth consecutive week in which the average has topped $5.00/gallon, after going more than 40 years since the last occurrence.

 

 

Supply

Domestic raw steel production increased slightly last week after a slight pull back during the prior week.

• • U.S. steelmakers produced 1.777 million tons at an 81.4% utilization rate.
  • Despite the recent rebound, YTD production is now down 1.7% compared to the same timeframe last year.

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DEMAND

Carbon flat rolled consumption continued to improve in March, climbing to a 151.2 thousand tons/day rate.

• • While up from February, total flat rolled consumption was down from March 2021.
  • Despite the month-over-month decline, total Q1 2022 flat rolled consumption was up 2.3% compared to Q1 2021.
  • Coated flat rolled consumption continued to improve as well, climbing to its highest daily rate (60.66 thousand tons/day) since December.

 

North American (U.S. and Canada) shipments of tractors and combines continued to slow in April, now down for the second consecutive month.

• • Shipments totaled 35,148 units in April, up from March but down sharply from April 2021.
  • The two consecutive year-over-year declines came after eight consecutive increases.
  • Shipments of both tractors and combines declined in April, with the sharper year-over-year decline (-21.6%) coming from tractor shipments.
  • Year-to-date tractor​ and shipments are now down 12.8% from the first four months of 2021.

 

ECONOMIC

While down slightly from the 40+ year high in March, prices paid by consumers remained elevated in April.

• • The April consumer price index came in at 289.1, up 8.26% from April of last year.
  • This is down slightly from the 8.54% increase seen in March.
  • Excluding the volatile food and energy sectors, prices saw a 6.16% increase on a year-over-year basis.
  • This was the lowest, year-over-year increase, since January.
  • The boost in the core-CPI came from airline fares, which saw its largest 1-month increase in history (1963).
  • Prices also continued to climb for key things like housing, lodging away from home, and new vehicles.
  • However, a few components saw slight declines in pricing in April, including apparel, communication, and used vehicles.
  • Used vehicle prices have now declined for three consecutive months.

 

 

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.