MARKET CONTINUES TO FACE HEADWINDS AS COSTS EASE
Inflation and record high diesel pricing are still creating market turbulence even as some input costs and imports cool. While still elevated, costs have settled below March’s spikes.
- Zinc pricing has fallen back after 15-year highs, but demand is still anticipated to outpace supply in 2022.
- Scrap dropped 10% from the decade-plus high in April due to declining global demand, revised mill melt mixes and increased scrap imports.
- Imports are slowing but the market has yet to feel the pull because of continuously long lead times. In the short term, this lack of available import material will help to keep domestic mill order books stable and domestic prices range-bound
- Demand from auto production is recovering from the chip shortage slowdown, and expected to absorb excess coated spot material.
- Economic factors are currently mixed. Weakened U.S. demand from a cautious economic outlook and the U.S. Dollar trading at a 5-year high both typically have a cooling effect on pricing. However, continued inflation and record-high diesel prices are keeping costs elevated.
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.