Economy
SMU's December At-a-Glance
Written by Brett Linton
January 5, 2021
Strong demand and tight supply pushed steel prices upwards throughout December, with hot rolled prices nearing quadruple digits as 2020 came to a close. Steel Market Update’s hot rolled price index reached $985 per ton by the end of December, up $180 per ton or 22 percent from the beginning of the month. The SMU Pricing Momentum Indicator remained at Higher, indicating prices are expected to rise further over the next 30 days. Scrap prices increased by $80-100 per ton compared to the month prior, while zinc prices remained relatively steady and aluminum prices declined by 2 percent.
The SMU Buyers Sentiment Index remained optimistic, slightly declining to +61 as of late-December. The three-month moving average reached +64.67 as of Dec. 23, the highest reading since October 2018.
Key indicators of steel demand overall remained positive. The ISM Manufacturing Index continued to indicate further expansion in the economy. Construction spending increased from September to November, while the AIA Billings Index and private employment growth both declined. Total U.S. steel imports and exports rose from September to October.
See the chart below for other key metrics in the month of December:
By Brett Linton, Brett@SteelMarketUpdate.com
Brett Linton
Read more from Brett LintonLatest in Economy
US construction spending levels off in March
Construction spending in the US in March was basically steady from the previous month but showed notable year-on-year (y/y) growth.
ISM: Manufacturing sector contracted in April
The Index had briefly showed expansion in March, but has indicated a contracting manufacturing sector for 17 of the last 18 months.
Chicago Business Barometer falls to 16-month low
The Chicago Business Barometer slipped further in April, now at the lowest measure recorded since November 2022.
Leading nonres indicator falls to more than three-year low
An important economic indicator for the nonresidential construction industry declined in March to its lowest point in more than three years.
Fed Beige Book: Economy improves, but manufacturing weak
While general economic conditions across the US improved slightly over the last six weeks, activity in the manufacturing sector was weak, according to the Fed’s latest Beige Book report.