The monthly Construction MMI® registered a value of 90 in November, a decrease of 2.2 percent from 92 in October. MetalMiner originally released the index value via the MetalMiner IndX℠ on Nov. 1, and this monthly index report represents metal price movements from Oct. 1 to Nov. 1.
Though the construction metals index fell by two points this past month on the back of falling European aluminum sheet as well as US shredded scrap prices, China saw a lift in prices for a couple of key steel products used in the construction sector.
“From rebar to H-beam to aluminum bar, economic activity and prices have increased within the Chinese market,” said Lisa Reisman, managing editor of MetalMiner. “Domestically, we are seeing better numbers for residential construction,” Reisman added, “though that remains a bit tempered by commercial construction activity, which fell 1.2 percent (seasonally adjusted) in August, according to Reed Construction Data.”
More commentary and detail on individual price movements below.
Residential construction spending increased by 2.9 percent, according to Reed Construction Data, following a 1.6 percent increase in July. Again, despite the drop in the construction metals index, we don’t see any immediate red flags that would continue to hamper growth.
“In fact, depending on how many homes will need repair and re-building post-Hurricane Sandy, the construction sector may see an additional lift later this year and into next,” said Reisman.
Price Drivers of the Construction Metals Index
The price of US shredded scrap declined 10.4 percent over the past month. After rising 3.8 percent the previous month, European 1050 aluminum prices dropped 4.8 percent. The weekly US Midwest bar fuel surcharge decreased by 1.2 percent this month. The weekly US Rocky Mountain bar fuel surcharge was down 0.3 percent.
Following a 4.7 percent upswing, the Chinese low price of 62% Australian iron ore fines closed the month on a higher note. Chinese rebar recorded a 3.2 percent increase. The price of Chinese H-beam steel increased 3 percent.
Chinese aluminum bar inched up only slightly, by 0.8 percent last month.
The Construction MMI® collects and weights 9 metal price points used within the construction industry to provide a unique view into construction industry price trends over a 30-day period. For more information on the Construction MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.