Steel Markets

Housing Data Weakens in April
Written by Sandy Williams
May 18, 2021
April housing starts fell 9.5% to a seasonally adjusted annual rate of 1.57 million units, following March’s fastest climb since June 2006. Soaring construction costs and home prices were blamed for the April decline.
Single-family starts plunged 13.4%, although multi-unit homes gained 4%, said the U.S. Census Bureau and the U.S. Department of Housing and Urban Development in an announcement today.
Permit authorizations, a future indicator for housing construction, inched up just 0.3% from March. Permit authorizations for single-family homes fell 3.8% but authorizations for apartment-style homes of five units or more rose 11.1%.
“Housing production declined in April due to rising prices and limited availability of lumber and other building materials,” said Robert Dietz, chief economist at the National Association of Home Builders. “Single-family housing starts are up 28% on a year-to-date basis; however, the numbers are distorted by the weak readings of the spring of 2020.”
“Builder confidence remains solid in spite of supply-side challenges, according to the NAHB/Wells Fargo Housing Market Index (HMI),” said Dietz. “However, after peaking at a level of 90 last November, builders report growing concerns over increasing lumber and other construction costs, as well as delays in obtaining building materials. Rising interest rates will also erode housing affordability in 2021, though rates have fallen back in recent weeks. Builders also report growing concerns about a more challenging regulatory environment that could limit land development volume.”
NAHB is predicting that early 2021 weakness in single-family home construction will give way to the “long-run post-Great Recession trend as the year progresses.”
Regional data compared to the previous month shows permits up 8.4% in the Northeast and 3.9% in the South. Permits declined 9.9% in the Midwest and 4.1% in the West.
Housing starts grew 6.2% in the Northeast and 9.0% in the West, but plunged 34.8% in the Midwest and 11.5% in the South.

Sandy Williams
Read more from Sandy WilliamsLatest in Steel Markets

Hot-rolled coil buyers continue seeing certainty
Steel market participants contend that buyers will remain in “wait-and-see" mode until some market stability is restored.

Latin American steel advocates warn on cheap import flood
Subsidized Chinese steel imports and cheap steel products from Association of Southeast Asian Nations (ASEAN) entering Latin American (LATAM) are threatening the region's steel market.

CRU: Steel prices fall amid global demand weakness
The forceful headwinds bearing down on steel markets across the globe have created demand challenges and sent prices southward. The US, however, challenged the global trend.

Hot-rolled price hikes garner mixed reactions from the market
Several steel market sources say they were blindsided when mills increased spot prices for hot-rolled coils this week.

Steel market participants mull the impact of US/Mexico S232 negotiations
Steel market participants learned that negotiations between the US and Mexico include discussions about Section 232 tariffs on steel and aluminum despite President Trump’s June 3 proclamation increasing the tariffs from 25% to 50% for all steel and aluminum imports—except for those from the UK.