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February 2020 Insight Guide: Market Indicators

Economic News

The U.S. economy grew 2.3% in 2019, a slow down from the previous year when the economy grew 2.9%. Consumer spending is expected to remain the top driver of economic growth.

January added 225,000 jobs. This is well beyond what economists predicted and is most likely due to an unseasonably warm January. Meanwhile, the unemployment rate ticked up to 3.6%. However, the labor force participation rate increased 0.2 percentage points to 63.4%, its highest level since June 2013.

Economic Indicators

The Architecture Billings Index registered at 52.5 in December, up from 51.9 in November. This was fueled by growth in both new project inquiries and design contract executions – any score above 50 indicates an increase in demand for design services.

The January Purchasing Manager’s Index registered at 50.9%, up 3.1 percentage points from December. The New Orders Index registered at 52%, an increase of 4.4 points from the previous month. The Production Index registered at 54.3%, up 9.5 points compared to December.

Durable Goods new orders increased in December, up 2.4%. This was led by an increase in defense spending.

The Consumer Confidence Index increased to 131.6 in December from a score of 128.2 in December. This was driven primarily by a more positive assessment of the current job market and increased optimism about future job prospects.

Steel Industry News

The U.S. steel industry is optimistic about the new United States-Mexico-Canada Agreement (USMCA). The trade deal, that replaces the North American Free Trade Agreement, incentivizes the use of steel made in North America for a variety of products. It also imposes new safeguards against steel dumping.

According to American Iron and Steel Institute President and CEO Thomas Gibson, USMCA promotes increased cooperation among the North American government to address circumvention and evasion of trade remedy orders.

For more information, contact your local sales rep or view the February 2020 Insight Guide below.

Metalwest Market Insight - February 2020
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January 2020 Insight Guide: Market Indicators

The Economy

The U.S. economy has expanded for a record of 126 straight months as of December2019. Meaning, the U.S. has avoided a recession for an entire decade for the first time ever.

Economists say this is due to the U.S. coming from such a low point at the end of the last decade. Much of the expansion the past ten years was spend recovering from the Great Recession.

The U.S. job market ended 2019 with a disappointing 145,000 jobs added in December. The unemployment rate held steady at 3.5%.

Economic Indicators

The Architecture Billings Index scored at 51.9 in November 2019. This is the second month of modest growth for the industry.

The Purchasing Managers Index for December 2019 registered at 47.2%, a decrease of 0.9 points from the November reading of 48.1%. This is the lowest reading since June 2009.

The Steel Industry

U.S. steelmakers are hiking sheet prices effective immediately. Nucor Corp lead the hike on January 8 and was quickly followed by ArcelorMittal USA and NLMK USA. West Coast suppliers also followed suit with USS-Posco Industries and California Steel Industries also raising flat prices.

For more information, view the January 2020 Market Insight below or contact your local sales representative.

Metalwest Market Insight - January 2020
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December 2019 Insight Guide: Market Indicators

The Economy

U.S. trade deficit dropped almost 8% in October to a 16-month low. This is largely due to lower imports from China tied to the ongoing trade dispute. The deficit slide to $47.2 billion from a revised $51.1 billion the prior month. If this persists through this month, the smaller gap could boost gross domestic product for the fourth quarter.

The U.S. added 266,000 jobs in November, far more than expected. The unemployment rate registered at a historical low of 3.5%.

Economic Indicators

The Architecture Billings Index for October registered at 52, up 2.3 points from September. A score above 50 indicates an increase in billings from the previous month.

The November Purchasing Managers Index registered at 48.1%, down 0.2 points from the previous month. The New Orders Index registered at 47.2%, down 1.9 points from October. The Production Index registered at 49.1%, up 2.9 points from the previous month.

The Steel Industry

President Donald Trump has imposed new tariffs on steel and aluminum imports from Brazil and Argentina, according to a Tweet he sent out on December 2.

The Section 232 tariffs that went into effect on March 23, 2018, impose a 25% tariff on imported steel and 10% on imported aluminum. In May 2018, the U.S. government announced that it reached agreements with Argentina, Australia, and Brazil on their steel and aluminum quotas. Argentina secured a “permanent exemption.”

The U.S. steel industry is currently waiting to find out whether the tweet has the power to shape domestic trade policy. So far, nothing has happened since the president sent out the tweet.

For more information, contact your local sales representative or view the December 2019 Market Insight Guide below.

Metalwest Market Insight -December 2019
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November 2019 Insight: Market Indicators

The Economy

U.S. productivity fell for the first time since 2015 in the third quarter. This reflects a cutback in production as the U.S. economy slowed. Productivity declined at a 0.3% annual rate while economists predicted a 0.6% increase.

The U.S. economy added 128,000 jobs in October while the jobless rate edged up to 3.6%.

Economic Indicators

The Architecture Billings Index registered at 49.7 in September, slightly below the 50.0 threshold that signifies growth in billings. This is up 2.5 points from the August reading, however.

The October Purchasing Managers Index registered at 48.3% in October, up 0.5 percentage points from September. The New Orders Index registered at 49.1%, up 1.8 points from the previous month. The Production Index registered 46.2%, down 1.1 points from September.

The Steel Industry

U.S. steel imports increased month-over-month in October as countries subjected to the Section 232 quotas rushed to export their material at the beginning of the fourth quarter. The increase was highly anticipated following a similar jump seen in July. This is largely due to Brazil, a major source of U.S. slab imports, being subjected to a Section 232 quota that reopens every quarter.

Due to the falling U.S. Midwest aluminum premium, stronger currencies in Asian, and sustained higher freight rates, the estimated arbitrage opportunities between the U.S. and Asia have been limited. Weak demand and cheap scrap are the primary reasons for the Midwest premium’s downward trend.

For more information, view the “November 2019 Market Insight Guide” below or contact your local sales representative.

Metalwest Market Insight - November 2019
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October 2019 Insight: Market Indicators

Economy

Manufacturing activity in the U.S. contracted for the second month in a row in September, falling to its lowest level in 10 years. The Institute of Supply Management’s manufacturing index dropped to 47.8 last month.

U.S. job growth increased in September, with the unemployment rate dropping to 3.5%; payrolls increased by 136,000 jobs.

Indicators

The Architecture Billings Index dropped to 47.2 in August compared to July’s reading of 50.1. This indicates a decrease in firm billings as any score below 50 reflects a decline.

The Purchasing Managers Index registered 47.8% in September, down 1.3 points from August. The New Orders Index registered at 47.3%, up 0.1 points from the previous month. The Production Index registered at 47.3%, a 2.2-point decrease compared to August.

Steel Industry

The U.S. steel industry has seen weak activity this year. However, in August Trump said that the industry is “thriving” under his administration. While reviving the steel sector was a key part in Trump’s presidential campaign, the 25% tariff on U.S. steel imports hasn’t seemed to help. Steel production has risen, but demand is low. Prices have also fallen.

You can read more about the impact of the tariffs here.

For more information about the Metalwest Market Insight, view the guide below or contact your local sales representative.

Metalwest Market Insight - October 2019
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September 2019 Insight: Market Indicators

The U.S. economy grew at a modest pace in the past few weeks, with manufacturing rocked by a global slowdown according to the Federal Reserve.

The ongoing trade war between the U.S. and China appears to be weighing on business according to the U.S. central bank’s latest Beige Book compendium. However, many businesses also remain optimistic about the near-term outlook.

The U.S. economy added 130,000 jobs in August as the unemployment rate held steady at 3.7%.

July’s Architecture Billings Index registered at 50.1, up 1 point from the previous month. This indicates an increase in demand as any score above 50 represents an increase in billings.

The August Purchasing Managers Index registered at 49.1%, a decrease of 2.1 percentage points from the July reading of 51.2% The New Orders Index registered at 47.2%, down 3.6 points from the previous month. The Production Index registered at 49.5%, a 1.3-point decrease compared to July.

U.S. steel imports have surged 48.3% in July according to the latest AISI report. Finished steel imports also went up 6.6%. Despite the spike in July, total steel imports are down 10.6% year to date on a year-over-year comparison. Finished steel imports are also down 16.4% year-over-year.

For more information view the “September 2019 Metalwest Market Insight Guide” below or contact your local sales representative.

Metalwest Market Insight - September 2019
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August 2019 Insight: Market Indicators

Economic News

U.S. employers added 164,000 jobs in July, as the unemployment rate held steady at 3.7%. This is a little lower than the 165,000 jobs analysts expected.

The Architecture Billings Index score for June as 49.1, down from the 50.2 reading in May. Any score below 50 indicates a decrease in billings.

The July Purchasing Managers Index registered at 51.2%, a decrease of 0.5 points from the June reading. The New Orders Index registered 50.8%, up from the June reading of 50%. The Production Index registered at 50.8%, a decrease from the June reading of 54.1%.

China allowed its currency to fall to its lowest level against the U.S. dollar in 11 years and suspended purchases of U.S. farm goods earlier this week. Following the news, the Trump administration branded China a “currency manipulator.” This could signal a threat of a destabilizing currency war that would infect the global financial system.

Steel Industry News

The U.S. steel industry views the U.S. Department of Treasury’s move to designate China as a currency as “welcome news,” according to American Iron and Steel Institute CEO Thomas Gibson. The AISI has long advocated for the U.S. government to take action in regards to currency manipulation.

Global crude steel production reached 925.1 million tons for the first half of 2019, marking a 4.6% increase compared to the same period in 2018. U.S. production reached 7.3 million tons in June, up 3.1% year-over-year.

For more information, contact your local sales representative or view the Metalwest Market Insight Guide below.

Metalwest Market Insight - August 2019
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July 2019 Insight Guide: Market Indicators

U.S. Economy

The U.S. added 224,000 jobs in June, an indication of the economy’s durability after more than a decade of expansion. This is after a weak job growth of just 72,000 in May. The unemployment rate ticked up to 3.7%, up from 3.6% the previous month.

Billings at architectural firms were essentially flat in May. The Architecture Billings Index registered at 50.2. This still indicates a small increase in billings as it is above the 50-point threshold.

The June Purchasing Managers Index registered at 51.7%, a decrease of 0.4 points from May. The New Orders Index registered at 50%, down 2.7 points from the May reading of 52.7%. The Production Index registered 54.1%, up 2.8 points from May.

U.S. Steel Industry

Hot-rolled coil prices in the U.S. have remained above $27 per hundredweight as buyers are waiting to see whether a second round of mill increases will stick. Market participants generally agreed that the first round of price increases, announced in June, had stuck. Due to longer lead times at some producers, mills will most likely be able to hold the higher prices.

The U.S. Commerce Department issued affirmative preliminary determinations in the countervailing duty investigations of fabricated structural steel imports from China and Mexico and a negative determination for Canada. Commerce is scheduled to announce its final determination around November 19, 2019.

US Steel, a major American steelmaker, has lost $5.5 billion (roughly 70%) in market value and idled two furnaces since President Donald Trump announced a 25% tariff on imports of metal back in March 2018. The tariffs were expected to increase U.S. output and metal industry jobs. However, the increase in production came at the same time as demand began to cool, which in turn sent steel prices sharply lower. Growth in the U.S. is expected to continue to fall in the coming months.

For more information contact your local sales representative or view the full July 2019 Metalwest Insight Guide below.

Metalwest Market Insight - July 2019
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June 2019 Insight Guide: Market Indicators

The Federal Reserve hinted they would cut interest rates if the U.S. trade war threatens the decade-long expansion at a summit this week. The U.S. economy will mark 10 years of expansion in July, the longest on record. However, rising trade tensions between the U.S. and China have put a chill on U.S. businesses’ spending and caused a manufacturing slowdown.

Only 75,000 jobs were added in May amid President Trump’s ongoing trade wars. The unemployment rate held steady at 3.6%. This could signal signs that the Federal Reserve will increase rate cuts.

The Architecture Billings Index registered at 50.5 in April, a 2.7-point increase from last month. Any score above 50 indicates an increase in billings.

The May Purchasing Managers Index registered at 52.1%, a decrease of 0.7 points from the previous month. The New Orders Index registered at 52.7%, up 1 point from April. The Production Index registered at 51.3, down 1 point from the previous month.

Hot-rolled coil prices have begun to signal a steel market downturn, with prices reflecting trends not seen since the 2008 global financial crisis. Prices in the U.S. have been falling fast.

Executives at U.S. steelmakers are pushing back against Trump’s abrupt announcement he intends to slap tariffs on Mexican imports, fearing it will cause a stalemate to the new North American free-trade deal. However, Senator Kevin Cramer, a North Dakota Republican, predicted that the Senate would have enough votes to override a presidential veto and keep Trump’s tariffs from going into effect on June 10.

For more information, contact your local sales rep or view the June 2019 Metalwest Market Insight below.

Metalwest Market Insight - June 2019
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May 2019 Insight Guide: Market Indicators

The U.S. economy picked up steam in the first quarter of 2019, according to the Commerce Department. Gross domestic product grew at an annual rate of 3.2% in the first three months of the year, up from 2.2% the end of 2018.

U.S. employers added 263,000 jobs in April while the unemployment rate dropped to 3.6%, the lowest in nearly 50 years. A snapshot from the Labor Department showed solid hiring in services, construction, and health care.

The Architecture Billings Index for March registered at 47.8, a decrease of 2.5 points from the previous month. It was also the first time the score entered negative territory in 25 months; a score under 50 reflects a decrease in billings.

The April Purchasing Managers Index registered at 52.8%, a decrease of 2.5 percentage points from March. The New Orders Index registered at 51.7%, a decrease of 5.7 percentage points from the previous month. The Production Index registered at 52.3, down 3.5 points from March.

U.S. steel import licenses rose up slightly month-over-month in April with a surge in wire rod volumes offsetting losses in flat product shipments. Overall volumes still fell year-over-year. The U.S. was licensed to import nearly 2.55 million tonnes of steel in April.

Crude steel production in the U.S. rose by 6.8% in the first quarter of 2019, above the global rate of 4.5%. The higher growth was largely attributed to the Trump administration’s Section 232 trade remedy.

U.S. manufacturing activity slowed in April to a 2-1/2-year low amid sharp drop in new orders and an unexpected fall in construction spending. This suggests economic growth was moderating after a surge in the first quarter.

For more information, view the May 2019 Metalwest Market Insight below or contact your sales rep.

Metalwest Market Insight - May 2019