Market Update | September 7, 2022

 

VEHICLE INVENTORY INCREASED SHARPLY IN AUGUST

After sliding in three of the past four months, U.S. light vehicle inventory increased sharply in August. U.S. light vehicle inventory totaled 1.268 million units, up 10.2% from July and up 18.8% from 1.067 million units in August 2021. This is the highest monthly inventory total since June 2021.

 

Input Costs

The recent up and down movement for zinc continued this week, as pricing dropped from last week.

    • Zinc pricing came in at $1.45/lb this week, remaining below $1.60/lb for the third straight week.

 

Spot iron ore pricing slipped again this week, now down for the fourth consecutive week.

    • Spot iron ore pricing slipped again this week, now down for the fourth consecutive week.

    • Spot iron ore pricing is currently at $97.30/mt, down 0.3% from the end of last week and is now down 10.6% on a m/m basis.

 

Pacific Basin met coal pricing was virtually flat this week after climbing the three previous weeks.

    • Current pricing is at $273.50/mt, flat from the end of last week and 34.4% from this time last month.

 

The Chinese State Council announced more stimulus measures earlier this week, including an additional 300 billion yuan ($44 billion) for infrastructure spending and bank investments.

    • This could provide a bump to both their steel and iron ore markets, which have been in a months-long decline.

 

 

Supply

Domestic raw steel production declined again, now down in back-to-back weeks.

    • U.S. steelmakers produced 1.715 million tons at an 77.8% utilization rate.
    • YTD production is now down 3.7% from the same time last year.

 

 

DEMAND

After sliding in three of the past four months, U.S. light vehicle inventory increased sharply in August.

    • August U.S. light vehicle inventory totaled 1.268 million units, up 10.2% from July and up 18.8% from 1.067 million units in August 2021.

    • This is the highest monthly inventory total since June 2021.

    • Inventory of both cars and light trucks increased from July, climbing 24.1% and 10.7%, respectively.
    • The current inventory level, when combined with August’s sales pace, equates to 29 days of supply.
    • While this is a sixteen-month high, it remains well below the “normal” level of 65 days.

 

 

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.