After four weeks of increases, domestic steel market is down again
Last week ended with a decrease in domestic raw steel production, a slight decrease in shipments of HVAC equipment and an increase of claims for unemployment, according to a recently released report by Majestic Steel.
U.S. steel mills produced an estimated 1,862k tons at an 80.5 percent utilization rate. From the report:
This is down from 1,888k tons and an 81.6 percent rate previously. Despite the dip, domestic production remains above the all-important 80 percent. utilization rate that the mills strive for. Production decreased in three of the five regions, with the largest decrease (in tons) coming from the Southern region. Production from the Southern region dropped from 767k tons to 729k tons. Year-to-date production continues to drop, now 4.2 percent above the same time frame from last year.
In September, shipments of HVAC equipment slipped to 1.560 million units, which is down 14.7 percent from August and down 0.5 percent from 1.569 million units in September 2018.
"On a year-over-year basis, to smooth out seasonality, furnace shipments dropped sharply. The 11.7 percent decline in furnace shipments outweighed the slight 2.0 percent and 3.0 percent increases for water heaters and A/C & heat pumps, the report reads. "Year-to-date HVAC equipment shipments is now at 15.919 million units, down 1.0 percent from the same time frame last year. However, shipments are up 5.0 percent from the same time frame in 2017."
On the unemployment front, claims for benefits increased to a five-month high last week, the report reads.
The Department of Labor’s Weekly Initial Jobless Claims report came in at 225,000 claims, up from 211,000 claims previously. However, claims for California, Hawaii, Kansas, Pennsylvania, Puerto Rico and Virginia were estimated due to the Veterans Day holiday. The four-week moving average, considered a better measure of the labor market as it irons out week-to-week volatility, in- creased to 217,000 from 215,250 previously. Continuing claims, or claims lasting longer than one week, decreased for the second consecutive week. Continuing claims dropped to 1.683 million, down from 1.693 million previously. Continuing claims were likely boosted in recent weeks by a 40- day strike at General Motors, which caused temporary layoffs at auto parts suppliers.
For more insights into the domestic steel market and more, visit the Steel Reports page at SNIPSmag.com.