Analysis
August 2, 2024
Written by David Schollaert
The construction sector added 25,000 jobs in July, driven by improved wage gains, according to the Associated General Contractors of America (AGC).
The AGC said that the gain was seen across all subsectors wage gains continued to outpace gains in the broader economy.
SMU’s Current Steel Buyers’ Sentiment Index ticked up this week, while Future Sentiment remained flat again, according to our latest market survey. Every two weeks, SMU polls thousands of steel-industry executives, asking them to rate their companies’ chances of success today and also three to six months down the road. We use their responses to calculate our proprietary Current and Future Steel Buyers’ Sentiment Indices, measures tracked since 2008.
Manufacturing activity improved in several Federal Reserve districts, but conditions remained mixed nationwide, according to the Fed’s Oct. 14 Beige Book report. Demand was strongest in steel, machinery, defense-related products, and data center infrastructure. Steel producers in the Cleveland District reported firm spot market demand. Data center, power-generation, defense, and aerospace projects supported orders. Long mill lead times kept customer inventories lean and prices high. Producers also reported higher orders from truck-trailer and light-vehicle manufacturers. International demand for hydrogen vehicle parts increased.
On the face of it, nothing much changed in the US steel market this week. Lead times continue to extend. Inventories remain lean. And mills can pretty much name their price. Sheet lead times, which extend well into December, remain at the highest levels we’ve seen since 2021. Plate lead times, meanwhile, set a new record. At 11 weeks on average, they’re higher than anything we’ve recorded – including during the boom year of ’21.
Lead times for sheet and plate continued to extend amid a domestic supply squeeze, according to the latest SMU steel market survey data. Average lead times stretch into mid- or late December, and those at some mills now extend into 2027. Lead times for all sheet products except Galvalume stand at their highest point since the post-covid demand snapback in 2021. Lead times for plate are now even higher than their 2021 peak.
Sheet buyers found mills slightly more negotiable on price this week, while plate buyers thought mills were less flexible on spot price tags, according to our latest survey data. Every two weeks, SMU surveys service center and manufacturer buyers to see whether mills will negotiate on new spot sheet and plate orders. In this week’s survey, 14% of respondents said mills were willing to talk price to secure an order, up three percentage points from two weeks earlier (Figure 1). This is the highest reading since July 8, when the rate stood at 18%.