October Market Minute 2022
Steel in Tight Supply?
Steel mills across the country continue to produce at levels below 80%.
According to the American Iron and Steel Institute, for the week of Oct. 1, 2022, domestic raw steel production was 1,700,000 net tons with a capacity utilization rate at 77.1%.
Compare this with 1,839,000 net tons and a utilization rate of 83.3% in the same week last year.
Now we enter Q4, during which many mills have planned outages. Could this take capacity rates down even further?
The good news? Steel sheet prices have fallen to their lowest level since Q4 of 2020.
Lower Stainless Surcharges Ahead?
Stainless surcharges could be moving lower. A contributing factor is the price of Chrome, which is down by about 20% from previous highs.
Some say this could push stainless surcharges lower by nearly 7 cents come November.
Is the Texas Economy Slowing?
Let’s start with the positive: Growth in Texas factory activity picked up in September. The production index, which is a key measure of state manufacturing conditions, rose by eight points to 9.3, according to the Federal Reserve Bank of Dallas.
But here’s the bad news:
The new orders index was down for the fourth consecutive month in a row. Historically, this suggests a continued decrease in demand.
The most recent jobs report from the Dallas Fed showed state employment was flat in August. In addition, the unemployment rate rose slightly to 4.1%, while labor force and wage growth eased as well.
Steel NOW-ledge:
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A992 vs A36: What’s the Difference and Which One Should You Use?
