Market Update | September 6, 2023
U.S. LIGHT VEHICLE SALES REBOUNDED SLIGHTLY IN AUGUST
August U.S. light vehicle sales totaled 1.313 million units, up 1.0% from July and up 15.7% from 1.127 million units in August 2022. The increase in total sales in August came from both light trucks and imported vehicles, which climbed 1.7% and 5.3%, respectively.
Input Costs
After sliding lately, zinc pricing increased this week.
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Zinc pricing came in at $1.12/lb this week, up from $1.11/lb last week but has remained in a relatively tight range for the past month.
- The average over the past 30 days is $1.10/lb.
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Spot iron ore pricing rebounded as well over the last week on the back of increased global buying.
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- Spot iron ore pricing is currently at $122/mt, up $10/mt from last week and is virtually flat from the start of the year.
Met coal pricing continued to push higher this week, climbing to $270/mt on the increased demand from India.
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- This is up 0.7% from last week and is up over 9.5% from this time last month.
Supply
U.S. raw steel production dropped again last week after the sharp drop the week before.
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- U.S. steelmakers produced 1.729 million tons at a 76.0% utilization rate after hitting a two-month high two weeks ago.
- The drop last week came from the South region, which saw back-to-back weekly declines.
- The current YTD utilization rate is at 76.0%, down 1.8% compared to the same time last year.
Preliminary total imports for August (24 days) were up slightly compared to the daily pace in July.
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- Flat rolled imports are coming in at a slightly faster rate as well compared to the daily pace in July.
DEMAND
After slipping in July, U.S. light vehicle sales rebounded slightly in August.
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August U.S. light vehicle sales totaled 1.313 million units, up 1.0% from July and up 15.7% from 1.127 million units in August 2022.
- The increase in total sales in August came from both light trucks and imported vehicles, which climbed 1.7% and 5.3%, respectively.
- Car sales slipped for the third consecutive month, sliding 0.5% to 190,810 units.
- Sales on a daily basis were up slightly from July and were right on the yearly average at 42,350 vehicles/day.
- Year-to-date light vehicle sales are now up 13.6% compared to the same timeframe last year but are down 3.7% compared to two years ago.
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Light vehicle inventory increased in August as dealers/producers try to get ahead of a potential production stoppage due to the strike.
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Light vehicle inventory increased to 1.926 million units in August, up 7.8% from July and up 52.1% from 1.266 million units in August 2022.
- This is the highest month-end inventory level since April 2021.
- Inventories of both domestic cars and light trucks increased in August, climbing 26.9% and 7.9%, respectively from July.
- The current inventory level, when combined with August’s sales pace, equates to 39 days of supply.
- This is up from 34 days in July but remains well below the long run average of 65 days.
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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.