Market Update | May 22, 2024

 

SALES OF EXISTING HOMES CONTINUED TO SLIDE IN APRIL

Existing home sales came in at a 4.140 million unit rate, down 1.9% from March and down 1.9% from the 4.220 million unit rate in April 2023. Sales have now declined on a year-over-year basis for thirty-two consecutive months. The inventory of unsold existing homes increased to 1.210 million units, the highest level since October 2022. The current inventory, when combined with April’s sales pace, equates to 3.5 months of supply. This is up from 3.2 months in March and above the post-pandemic average of 2.7 months. The median sales price increased to $407,600, up for the third straight month and at its highest level since last June.

 

Input Costs

Zinc pricing continued to push higher this week, now up for the eighth consecutive week.

• • Zinc pricing came in at $1.40/lb this week, up from $1.36/lb previously and is at its highest level in sixteen months.

 

Spot iron ore pricing slipped this week, sliding nearly $2/mt to $117/mt.

• • Rising inventories and low steel mill profitability in China, combined with weaker steel demand in 2024, have negatively impacted iron ore pricing since the start of the year.

 

Coking coal pricing was flat this week on the back of stagnant demand.

• • The current coking coal pricing of $243/mt, is up 0.1% from last week and is up 6.0% from this time last month.

 

 

 

SUPPLY

U.S. raw steel production rebounded slightly last week, now up for the third consecutive week.

• • U.S. steelmakers produced 1.728 million tons at a 77.8% utilization rate.
    • Production was up 0.8% from the prior week but down 1.5% from the same week last year.
    • YTD production is down 2.8% from the same timeframe last year.

 

Continued market uncertainty, which has helped limit order activity, helped to push the average coated lead time lower this week.

• • The average coated lead time slipped to 6.8 weeks, the lowest level since February 2023.
  • The asserted effort by the mini-mills to keep lead times low for HRC products has drifted into coated products (6.0 weeks) and is impacting the overall average.

 

 

 

DEMAND

U.S. light vehicle production was flat in April after climbing the previous three months.

• • US light vehicle production totaled 950,332 units, flat from March and up 15.8% from 820,564 units in April 2023.
  • While car production continued to decline, that decline was matched by an increase in light truck production

• • • Car production slipped to its lowest level since January while light truck production rebounded to its highest level since August.
  • Year-to-date light truck production is now up 8.3% from the same timeframe last year.

 

Sales of existing homes continued to slide in April, now down for the second consecutive month.

• • Existing home sales came in at a 4.140 million unit rate, down 1.9% from March and down 1.9% from the 4.220 million unit rate in April 2023.
    • Sales have now declined on a year-over-year basis for thirty-two consecutive months.
  • The inventory of unsold existing homes increased to 1.210 million units, the highest level since October 2022.
    • The current inventory, when combined with April’s sales pace, equates to 3.5 months of supply.
    • This is up from 3.2 months in March and above the post-pandemic average of 2.7 months.
  • The median sales price increased to $407,600, up for the third straight month and at its highest level since last June.

 

 

 

ECONOMIC

While the shipment component of the Cass Freight Index slipped in April, the expenditures component remained flat.

• • The shipment component slipped 1.3%, negatively impacted by softer demand and possible disruptions from the Baltimore bridge issue.
    • The expenditure component, which measures the total amount spent on freight, was flat from March.
  • The combination of less shipments but at the same spend, indicated inferred freight rates were up.
    • April freight rates were up 1.4% from March but still down over 13% from April last year.

 

 

 

 

 

 

 

 

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.