Analysis
June 7, 2023
Written by Becca Moczygemba
The Dodge Momentum Index (DMI) fell for the third consecutive month in May as weakness in commercial planning persists, according to the latest data from the Dodge Construction Network (DCN). The index reading is at its lowest level in nine months.
The DMI dropped 2% to 180.5 in May from the revised April reading of 184.1 but was still 11% higher than the same time last year.
The results of the latest Steel Market Update (SMU) flat-rolled market survey are now available on our website to all premium members. After logging in, look under the Data tab for Market Reports, and there you will find the Flat-Rolled Survey Results section. Previous survey results are also available on that page. If you need help accessing these results, or if your company would like to have your voice heard in our future surveys, contact smu@crugroup.com.
Open interest on CME Group’s hot-rolled (HR) coil futures contract typically builds throughout the month before dropping at the end of the month alongside contract settlement. Analysis in this report is based on an early month view of this open interest as well as prices. Notably, open interest for the HR coil contract is currently at a record high of 849,240 short tons (st) or 42,462 contracts. Open interest is up 13.8% m/m and 66% higher from the 511,480 st of open interest a year ago.
Ferrous scrap prices rose in November across all grades SMU tracks, though prices varied widely by region. “Marketwise, we saw disparate market movements between regions in the November trade, which wrapped up earlier this week,” one source told SMU. “It was a mixed bag, depending on the region and grade.”
Steel production has been suspended at a facility of Turkish steelmaker Habas following a deadly explosion, a source told SMU. SMU spoke with a source in Turkey who provided some further information after the incident at the mill in Aliaga, Turkey, occurred on Monday. (For background on the incident, click here.)
In this week's Market Chatter, steel buyers point to tight supply and steady demand as reasons sheet prices could keep rising, with many expecting HRC to reach $1,400-1,449 per short ton in two months. Views on when the rally will peak are mixed, with some anticipating further increases while others mention softening demand and political uncertainty. Respondents also disagree on tariffs' impact. They say reshoring is generating activity but has yet to translate consistently into demand.