Market Update | May 24, 2023

 

NEW HOME SALES INCREASED IN APRIL

Climbing for the second consecutive month and for the sixth time in the last seven months, new home sales came in at a 683,000-unit rate in April. This is up 4.1% from March and up 11.8% from the 611,000 unit rate in April 2022, making it the first month with a year-over-year increase since May 2021.

 

Input Costs

Zinc pricing continued to move lower this week, down for the second consecutive week.

    • Zinc pricing came in at $1.11/lb this week, down from last week and at its lowest level in more than two years.

 

After the run up over the previous three months, spot iron ore pricing has dropped sharply of late.

    • Spot iron ore pricing is currently at $102/mt, down from last week and down 4.1% from last month and down 11.6% from the start of the year.

 

Decreased coking coal demand from buyers in India has pushed pricing lower.

    • Coking coal pricing currently sits at $222/mt, down 5.1% from last week and down 11.6% from a month ago.
    • Coking coal pricing is still down 43% from the recent peak seen in mid-February.

 

 

Supply

U.S. raw steel production rebounded last week, climbing to its highest weekly output since Labor Day.

    • U.S. steelmakers produced 1.728 million tons at an 76.8% utilization rate: topping 76% for the fourth straight week.
    • The current YTD utilization rate is at 75%, down 5.5% compared to the same time last year.

 

Global steel production continued to increase in April, now up for the third consecutive month.

    • Global production came in at a 5.380 million mt/day rate in April, up 1.0% from March but down 1.3% from the 5.449 million mt/day rate in April 2022.
    • This was the highest daily production rate since May 2022.
    • While Chinese production was flat from March, production from the rest of the world increased.
    • Chinese production came in at a 3.087 million mt/day rate, flat from the March rate but down 0.2% from the rate in April 2022.
    • North American production increased in April, climbing 2.2% from March.
    • Increases in production from the U.S. and Canada helped to push the regional total higher.

 

 

DEMAND

Domestic light vehicle production slowed in April after seeing improvement throughout Q1.

    • U.S. light vehicle production totaled 829,672 units in April, down 13.5% from March but up 8.0% from 768,338 units in April 2022.

    • This is the thirteenth consecutive month in which production improved on a year-over- year basis.

    • Production of both cars and light trucks eased slightly in April, sliding 9.0% and 14.5%, respectively, from March.
    • For the first four months of 2023, total vehicle production (3.441 million units) is up 10.2% compared to the same timeframe last year.

 

Sales of new homes increased in April, climbing for the second consecutive month and for the sixth time in the last seven months.

    • New home sales came in at a 683,000-unit rate in April, up 4.1% from March and up 11.8% from the 611,000 unit rate in April 2022.

    • This is the first month with a year-over-year increase since May 2021.

    • The inventory of unsold new homes slipped to 422,000 units, the sixth consecutive monthly decline.

    • Current inventory, when combined with the April’s sales pace, equates to 6.8 months of supply.
    • The median sales price slipped to $420,800, the lowest level since December 2021.

 

 

 

 

 

 

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.