Steel Markets

Builder Confidence Declines in November
Written by Sandy Williams
November 19, 2018
Builder confidence, as measured by the NAHB/Wells Fargo Housing Market Index, fell eight points in November to its lowest reading since mid-2016. The index posting of 60 was still in positive territory, but indicated caution among builders.
“Builders report that they continue to see signs of consumer demand for new homes but that customers are taking a pause due to concerns over rising interest rates and home prices,” said National Association of Home Builders Chairman Randy Noe.
“For the past several years, shortages of labor and lots along with rising regulatory costs have led to a slow recovery in single-family construction,” said NAHB Chief Economist Robert Dietz. “While home price growth accommodated increasing construction costs during this period, rising mortgage interest rates in recent months coupled with the cumulative run-up in pricing has caused housing demand to stall.”
MarketWatch suggests the plunge in sentiment may be a harbinger of “something more sinister than a slower pace of building.”
“Home builders were one of the first groups to feel the top of the market cycle just before the Great Recession. In June 2005, NAHB’s index hit 72, its cycle high. It started to tumble the next month, and by mid-2006 stood in contraction territory,” wrote Andrea Riquier at MarketWatch.
NAHB does not go that far in its analysis of the housing market, but Dietz said policymakers should note the more cautious approach builders are taking toward the market.
“Recent policy statements on economic conditions have lacked commentary on housing, even as housing affordability has hit a 10-year low,” said Dietz. “Given that housing leads the economy, policymakers need to focus more on residential market conditions.”
On a three-month moving average basis, regional builder sentiment rose two points in the Northeast to 48, the Midwest fell one point to 57, the South declined two points to 68 and the West dropped three points to 71.

Sandy Williams
Read more from Sandy WilliamsLatest in Steel Markets

AISI: Raw steel production bounces back
Domestic mill production rebounded last week, according to the latest production figures released by the American Iron and Steel Institute (AISI). Production had been historically strong over the summer months before softening in early October.

US sets Section 232 tariffs on trucks and buses
Medium- and heavy-duty trucks (MHDV) and buses imported to the US will start being charged Section 232 tariffs beginning Nov. 1.

Hot-rolled sources say demand continues to dwindle, prices feel arbitrary
Genuine demand, they stated, will return when the market feels stable again.

FabArc Steel Supply completes projects in Mississippi, Georgia
FabArc Steel Supply announced this week the completion of two large-scale projects in Georgia and Mississippi.

Thin demand keeps plate prices hovering at lowest levels since February
Participants in the domestic plate market say spot prices appear to have hit the floor, and they continue to linger there. They say demand for steel remains thin, with plate products no exception.