Market Update | November 20, 2024

 

U.S. LIGHT VEHICLE PRODUCTION INCREASED IN OCTOBER

Light vehicle production totaled 966,169 units in October, up 10.1% from September and up 14.5% from the strike-impacted 843,625 units last October. On per/day basis, auto production was at its highest daily rate since April. Sales have now increased, on a year-over-year basis, in consecutive months.

 

PRICE

While the market appears to be showing some post-election excitement, it has yet to cause buyers to jump into action. Despite the continued slide in pricing, expectations are for pricing to see some upward momentum as we head into Q1.

  • Expectations are that the lower sheet import levels, light inventories, and improving demand are hoping to balance out new domestic supply.

 

Input Costs

Zinc pricing increased slightly this week, improving after three consecutive declines.

  • Pricing came in at $1.34/lb this week, up slightly from $1.33/lb last week.

 

Spot iron ore pricing remained relatively steady this week, holding at $107/mt.

 

Coking coal pricing slipped slightly this week, sliding to $204/mt from $206/mt last week.

  • Prices are down 1.2% from last week but still up 1.0% from this time last month.

 

SUPPLY

U.S. raw steel production slipped last week, sliding to its lowest level in a month.

  • U.S. steelmakers produced 1.623 million tons at a 73.1% utilization rate, down from 1.649 million tons last week.
    • Production was down 1.6% from the prior week and down 3.8% from the same week last year.
  • YTD production is down 2.5% from the same timeframe last year.

 

Preliminary results of a review of the antidumping duty on hot-rolled products from Japan determined that Nippon Steel sold HR into the U.S. at prices below normal value, assigning it a weighted-average dumping margin of 29.03%.

  • That’s up significantly from the 1.39% margin Nippon received in the prior one-year period.

 

DEMAND

Confidence among U.S. homebuilders continued to slow in November, albeit at its slowest decline since April.

  • The November Housing Market Index came in at 46, up from 43 in October and 34 in November 2023.
  • This is the second consecutive month in which the index has seen an increase over the previous year’s level.
    • As a reminder, any reading above 50 shows increased optimism, while any reading below 50 shows a pessimistic view.
  • The next six-month outlook continues to be the strongest, coming in at 64, the highest reading since April 2022.
    • While the present situation component was virtually neutral at 49, the traffic component continued to lag at 32.

 

New residential construction continued to slow in October, now down for the third time in the last four months.

  • October new housing starts came in at a 1.311 million unit rate, down 3.1% from September and down 4.0% from the 1.365 million unit rate in October 2023
    • The current rate continues to be below the YTD average of 1.355 million units.
      • Single unit starts slipped as well, sliding 6.9% compared to September.
  • Year-to-date starts are now down 3.2% compared to the same timeframe last year.
  • Permits, an indicator of future construction, slipped as well, sliding 0.6% to a 1.416-million-unit rate.
    • Permits were down 7.7% compared to last October, now down on a y/y basis for the seventh consecutive month.

 

U.S. light vehicle production increased in October and is now up for the second time in the last three months.

  • Light vehicle production totaled 966,169 units in October, up 10.1% from September and up 14.5% from the strike-impacted 843,625 units last October.
    • On per/day basis, auto production was at its highest daily rate since April.
  • Sales have now increased, on a year-over-year basis, in consecutive months.
  • Production increased for both cars and light trucks, increased 15.3% and 9.2%, respectively.
    • Year-to-date is up 3.2% compared to the same timeframe 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.