Inflation and COVID have something in common. Both are invisible to the naked eye yet will color the economic picture in 2022. And both may make their presence known next year with painful consequences. Turns out Steel Market Update readers are more fearful of the fiscal bug than the physical one. Steel Market Update’s questionnaire this […]
With 2022 just around the corner, steel buyers are looking back at one of the most profitable years in their history – thanks to all-time-high steel prices seen in 2021. That explains some of the staying power of lofty readings in Steel Market Update’s Sentiment Index. SMU surveys buyers every two weeks and asks how they view […]
Flat-rolled steel inventories continue to rise at service centers, and steel buyers are not flocking to do their normal end-of-year deals with steel mills. Steel Market Update has not yet produced our final Service Center Inventories and Shipment report. But we have published our “Flash” report, which we provide to our data providers after collecting five […]
Lead times for steel sheet and plate continued to decline over the past two weeks, shortening by an average of more than a week. The move correlates with a sharp downtrend in steel prices. Steel Market Update’s latest check of the market shows the average lead time for hot rolled orders nearing five weeks. Cold rolled […]
The pendulum has passed bottom and finally begun to swing the other way in price negotiations. Steel mills no longer hold a dominant bargaining position over spot buyers. That shift is consistent with the shortening lead times and declining prices reported by Steel Market Update. SMU asks buyers every two weeks whether mills are willing […]
Steel Market Update is pleased to share this Premium content with Executive members. For information on upgrading to a Premium-level subscription, email Info@SteelMarketUpdate.com. North American auto assemblies pushed higher in November, expanding for the second straight month as they recover from the lowest monthly total year-to-date in September. November’s production total was up 4.1% sequentially, […]
Steel prices continued to slide this week with the benchmark hot rolled number down another $40 per ton to an average of $1,730 per ton. That’s a decline so far of $225 per ton, or 11.5%, from the peak of $1,955 per ton in early September. In our questionnaire this week, SMU asked buyers where […]
The Dodge Momentum Index contracted in November following a 10.0% expansion the month prior. The index registered 171.7 in November, a 4.0% decline against the revised October reading of 178.1, according to data and analytics from the Dodge Construction Network. The value of nonresidential building projects continues to move in a sawtooth pattern, alternating between […]
Total construction spending edged higher in October, as gains in public and private project types outmatched decreases in single- and multifamily residential outlays, reported the Associated General Contractors of America (AGC). Public sector investments would likely rise in the near future as a result of the recently-passed infrastructure bill, according to the AGC, but they […]
The U.S. construction sector saw 31,000 new employees added to payrolls in November. Even though nonresidential construction firms added workers for a third straight month, the sector’s unemployment rate rose 0.7 percentage points to 4.7% during the same period, reports the Associated General Contractors of America (AGC) in its latest analysis of government data. The […]
Looking for floor plate for Christmas? What about hot-rolled coil for the New Year? You’re in luck. Cleveland-Cliffs Inc.’s steel mill in Riverdale, Ill., can get floor plate to you by Dec. 25, or just 18 days from now. And most of its sheet mills can get you hot-rolled coil by Jan. 1, or 25 days […]
U.S. construction spending rose fractionally in October after contracting the two months prior, but actual construction outlays year-to-date are 7.5% greater than the first 10 months of 2020, the Commerce Department reported. The Census Bureau’s report on construction spending shows residential slipped 0.5% during October, the once meteoric market now in its fourth month of easing. […]
I’m concerned we’ve all gotten a little too complacent with the idea that the price correction underway will continue to be gradual and that the new floor for hot rolled coil, whatever it is, will be four digits instead of the sub-$400-500 per ton floors that have characterized past downcycles. I’m not saying we’re headed […]
(Editor’s note: This is a corrected version of Final Thoughts. The original misstated a hot rolled peak of $1,995 per ton, not $1,955.) In our questionnaire this week, we asked steel buyers: Do you sense that the market is changing, and in what ways? Not surprisingly, many referenced shortening mill lead times and declining steel prices. […]
Stellantis – the Dutch parent company of Chrysler – will idle production for two weeks at one of its U.S. plants because of the ongoing global microchip shortage, a company spokeswoman said. The Auburn Hills, Mich.-based automaker’s assembly plant in Belvidere, Ill., will be down starting the week of Dec. 6 and will remain down through the week […]
Sometimes it is the little things that provide hints as to the direction steel prices will take. During our Steel 101 workshops, I use the example of when you hear from that steel salesman on what seems like a daily basis – that’s when you know a market is about to turn (or has turned). […]
Published mills lead times are back, another sign that the steel market is returning to something resembling normal. Hot-rolled coil lead times, for example, are three to four weeks at some mills. That would be unremarkable in a normal market. But it is news after a year in which customers were either on allocation or […]
With steel prices trending downward as 2021 comes to a close, there is a different tone to annual contract negotiations, respondents to Steel Market Update’s market trends questionnaire said. Talks are more contentious, reported many buyers, as mills seek to lock in volume near current prices for 2022, while service centers and OEMs are reluctant to […]
Engineering and construction costs continued to rise in November, though at a slower rate than in October, according to IHS Markit and the Procurement Executive Group (PEG). The November 2021 headline IHS Markit PEG Engineering and Construction Cost Index declined from 74.2 in October to 67.4 in November. The sub-index for materials and equipment costs drove […]
Steel Buyers Sentiment saw a notable dip this week, as did steel prices. Industry sentiment tends to track with steel price tags – the stronger the prices, the more optimistic service center and OEM executives who respond to SMU’s surveys. While sentiment remains near record levels, the downtrend suggests optimism, like prices, may have peaked. SMU […]
Steel buyers have gained a clear advantage when it comes to negotiating lower prices for hot-rolled coil and galvanized product. The change in pricing power toward buyers – following a year in which mills could name their price – comes as prices for most products are down, lead times are coming in, and inventories are increasing. SMU […]
First, please note that due to the Thanksgiving holiday, the Steel Market Update newsletter will not be published on Thursday (which is Thanksgiving Day) and Sunday, Nov. 28. We will return to our normal publication schedule on Tuesday, Nov. 30. We want to wish everyone in the United States a happy, healthy Thanksgiving with family and […]
Existing-home sales grew for the second straight month in October, reported the National Association of Realtors. Of the four major U.S. regions, only the Midwest and South regions registered month-over-month gains. The Northeast fell 2.6% while the West held steady. Annually, however, all four regions reported declining sales versus the same year-ago period. October sales […]
Spot prices might be wobbling. But mill balance sheets are as strong as they’ve ever been – and the cash will continue to pour in as 2022 contracts reset at substantially higher numbers. Here are two opposing trends I’m keeping an eye on: (1) whether mills will use their cash hoards to expand outside of steel […]
The North American auto industry may have turned a corner when it comes to the widespread production outages and assembly delays caused by the shortage of semiconductor chips. As recently as mid-October, GM, Toyota, Ford, and Honda were still reporting extended widespread outages. The turn has been noticeable in one month’s time. Automakers have managed […]
With 2022 right around the corner, it’s time to reflect back on an unusual and eventful year for the steel industry. Following is Steel Market Update’s Top 10 News Events of 2021: #10 – Economy Rebounds from COVID: No one could have predicted when the virus crippled commerce in the spring of 2020 that the […]
Housing starts slipped 0.7% in October as single-family housing production lagged, hampered by supply-chain shortages and limited access to labor and lots. Overall housing starts decreased to 1.52 million units, seasonally adjusted, according to the latest data from the U.S. Census Bureau and the Department of Housing and Urban Development. The October reading of 1.52 […]
With relatively few exceptions, buyers tell Steel Market Update they sense the market is changing, and they expect steel prices to continue falling – though most expect the declines to be gradual. Their views are likely informed by price trends to date, which have been incremental, at least so far. The average price of hot rolled […]
Strong consumer demand and low inventories helped push builder confidence higher in November for the third consecutive month despite continued supply-side challenges. Even though the construction sector continues to wade through building material bottlenecks and lot and labor shortages, builder sentiment for newly built single-family homes moved three points higher to an index reading of […]
Steel Market Update is pleased to share the below excerpt of a Premium item with Executive members. SMU publishes service center shipment and inventory data for Premium subscribers on the 11th business day of each month, one day after our data providers receive the data. Premium member reports include expanded analysis with detailed shipment and inventory levels, […]