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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
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April 2019 Insight Guide: Market Indicators

The U.S. job market bounced back in March after a lackluster performance in February. There were 196,000 jobs added in March, this is the 102nd straight month of job gains. The unemployment rate was at 3.8% for March, unchanged from the previous month.

February’s Architecture Billings Index score was 50.3, down from 55.3 in January. This is still an increase in firm billings as any score above 50 reflects an increase.

The March Purchasing Managers Index registered at 55.3%, an increase of 1.1 percentage points from the February reading. The New Orders Index was at 57.4%, up from the February reading of 55.5%. The Production Index registered 55.8%, a 1-percentage point increase over the previous month.

The American Institute for International Steel (AIIS) has appealed its case to tear down President Trump’s Section 232 tariffs and quotas on imported steel. The AIIS plans to take the case to the highest U.S. court if necessary.

The U.S. Court of International Trade on March 25 ruled against the AIIS’ case, which says that Section 232 violates the U.S. Constitution. AIIS immediately appealed the case to the U.S. Court of Appeals for the Federal Circuit.

The number of active oil and gas rigs rose by 19 after two weeks of big losses in the U.S. this week in a sign that U.S. production is still set for increases.

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

Metalwest Market Insight - April 2019
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March 2019 Insight Guide: Market Indicators

The U.S. economy matched its best performance since the Great Recession of 2007-2009 last year. The nation’s GDP increased at a rate of 2.6% in the October-December period. That followed an average of 3.7% the prior two quarters. For the year, the economy grew 2.9%. This is the highest performance since 2015.

U.S. job growth almost stalled in February, with the economy creating only 20,000 jobs. The unemployment rate fell back to below 4% and annual wage growth was at the best since 2009.

The January Architecture Billings Index climbed to 55.3, up 4.9 points from the previous month. This is also the highest score in more than two years.

The February Purchasing Managers Index registered at 54.2%, a decrease of 2.4 points from the January reading. The New Orders Index registered 55.5%, down 2.7 points from the previous month. The Production Index registered at 54.8%, a 5.7-point decrease over January.

Zinc treatment charges and spot premiums are expected to increase for 2019. The International Zinc Association conference took place earlier this week in Scottsdale, Ariz. The topic of prices in the zinc market was main takeaway from those in attendance at the conference.

U.S. Agriculture Secretary Sonny Perdue said he is working to persuade President Donald Trump that the U.S. steel industry can be protected by tariff rate quotas, rather than plain tariffs, on imports from Canada and Mexico.

The three countries signed the United States-Mexico-Canada Agreement (USMCA) on Nov. 30 to replace the North American Free Trade Agreement (NAFTA). Perdue has been advocating for the removal of tariffs since the signing of the USMCA.

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

Metalwest Market Insight - March 2019
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February 2019 Market Insight – Market Indicators

Economic News

President Trump delivered his State of the Union address Tuesday night. And while reviews were mixed, the facts on the U.S. economy speak for themselves. According to CBS News, some key measures of the economy’s performance for 2018, include:

  • The economy grew at its fastest rate in 13 years
  • Job creation has been strong by nearly any metric
  • Wage growth has picked up
  • U.S. trade deficit with China surges
  • America’s total debt keeps climbing

Employers added 304,000 jobs in January, marking the 100th consecutive month of employment gains. The unemployment rate rose to 4% from 3.9%, largely because of the government shutdown. Average hourly earnings rose 3 cents to $27.58.

The Architecture Billings Index score for December was 50.4 compared to 54.7 in November. While the score is down month-over-month, this still indicates an increase in billings as any score above 50 indicates an increase.

The January Purchasing Managers Index registered at 56.6%, an increase of 2.3 percentage points from the previous month. The New Orders Index registered at 58.2%, an increase of 6.96 percentage points from December. The Production Index registered 60.5%, 6.4 percentage points above the previous months’ reading.

Metals Market News

Hot-rolled prices continue to edge higher in the U.S. following mill price increases, while average lead times are three to five weeks.

The Midwest aluminum premium range narrowed with more buyers pursuing spot material. U.S. market participants claimed that spot activity accelerated slightly, with buyers appearing to be short on supply needs.

Prices for U.S. stainless steel sheet and plate declined in January, extending a downward trend mainly due to lower alloy surcharges. Lead times for stainless are around four weeks, which is considered short as average lead times are eight to 10 weeks.

Figureheads of the U.S. steel industry are providing plenty of positive feedback about President Trump’s ‘Buy American, Hire American’ executive order, stating that it will support American businesses and create good paying jobs for American workers.

For more information, download the February 2019 Metalwest Market Insight below or contact your local sales representative.

Metalwest Market Insight - February 2019
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January 2019 Market Insight – Market Indicators

Economic News

President Trump threatened to keep the federal government partly closed for “months or even years” if he does not get the funding for his wall at the U.S.-Mexico border, warning he may declare a national emergency to build it without congressional approval.

The partial shutdown also halted reviews of Section 232 exclusion requests, potentially prolonging a process that has already drawn much criticism from steel market participants.

The U.S. economy added 312,000 jobs in December, easing fears of recession amid the stock market turmoil. The unemployment rate rose from a 50-year low of 3.7% to 3.9%.

U.S. employers added the most workers in 10 months as wage gains and labor-force participation both increased. This reflects a robust job market that may still face mounting risks in 2019.

President Trump’s trade war is negatively effecting Americans more than Chinese consumers. Signs of threatened growth have arose across the global economy after tariffs were placed on hundreds of billions of dollars’ worth of products between the U.S. and China.

Economic Indicators

The November Architecture Billings Index registered 54.7, up compared to the October reading of 50.4. This is the strongest billings growth since January 2018. A score above 50 indicates an increase in billings.

The December Purchasing Managers Index registered 54.1%, down 5.2 percentage points from the November reading of 59.3%. The New Orders Index registered 51.1%, a decrease of 11 percentage points from the previous month. The Production Index registered at 54.3%, 6.3 percentage point decrease compared to November.

For more information, download the January 2019 Metalwest Market Insight below or contact your local sales representative.

Metalwest Market Insight - January 2019