After dropping four out of the past five previous weeks, domestic raw steel production increased slightly last week according to a recently released report by Majestic Steel. From the report:
U.S. mills produced an estimated 1,923k tons at an 82.5 percent utilization rate; this is up from 1,901k tons and an 81.5 percent rate previously. This is the highest weekly production output since late January. Production increased in all five regions, with the largest increase (in tons) coming from the Southern region. Production from the Southern region climbed from 712k tons to 723k tons. Year-to-date production remains 0.8 percent above the same time frame from last year.
Any increase in domestic production could be short lived after the Dow historically dropped 2,000 points on Monday, marking the biggest decline since the 2008 recession. Is a corona-induced recession on the horizon? That remains to be seen as the White House scrambles to make corrective action that will calm the market from chaos.
China is already feeling the affects of the coronavirus on its aluminum market, and the country's economy could mirror what will/could happen to other countries around the world as coronavirus cases rise.
Meantime, total construction spending was up by 1.8 percent from January to February at a $1.369 trillion rate according to the Majestic Steel report. This is a 6.8 percent increase from last year. From the report:
This was the largest year-over-year increase since February 2017. January total construction spending came in at its highest all- time seasonally adjusted rate. Spending increased for both residential and non-residential projects in January, climbing 9.2 percent and 5.1 percent respectively, on a year-over-year basis. The jump in January total construction spending came in much higher than the expected 0.7 percent increase.
On the zinc price front, pricing decreased again for the seventh consecutive week. "Zinc fundamentals continued to soften as the coronavirus widened its reach throughout the world, including the United States. However, the President of China, Xi Jinping, has urged the nation to get the economy back up and running next week," according to Majestic Steel's report on the market.
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