MetalMiner’s monthly construction metals index fell mainly on the back of Chinese steel and iron ore prices, and the US shredded scrap price – the most precipitous index decline since July-August 2012.
According to our friends at Reed Construction Data, “Prices for inputs used in nonresidential construction fell for the second month in a row [reflected in MetalMiner’s index, as seen in the graph above]. Major areas behind the decline include drops in copper, steel, and oil prices.”
In addition, the construction spending picture has become clouded with several elements slowing in growth, from non-residential construction down 2.1% for the first quarter over last year, and residential construction growing 1.7% in March, much lower than February’s comparatively whopping 4.0% gain.
“We have some concerns about construction growth, though admittedly some elements remain positive,” said Lisa Reisman, managing editor of MetalMiner. “These include residential and non-residential housing starts, both steel market leading economic indicators, according to our friends at Gerdau Market Update.”
Key Price Drivers
The monthly Construction MMI® registered a value of 87 in June, a decrease of 3.3 percent from 90 in May.
After falling 12.7 percent, the Chinese low price of 62% Australian iron ore fines finished the month at $150.75 per dry metric ton. At $531.29 per metric ton, Chinese rebar was down 6.6 percent for the month. A 5.4 percent decline for Chinese H-beam steel left the price at CNY 3,490 ($568.77) per metric ton. The price of US shredded scrap fell 4.7 percent to $364.00 per short ton. The price of European 1050 aluminum drifted 0.7 percent lower to $2,779 per metric ton.
The weekly US Gulf Coast bar fuel surcharge rose a slight 2.3 percent over the past month to $0.54 per mile. The weekly US Rocky Mountain bar fuel surcharge increased 2.2 percent to $0.53 per mile. Finishing at $0.51 per mile the weekly US Midwest bar fuel surcharge saw a 0.5 percent shift lower for the month.
Last month was consistent for Chinese aluminum bar, which did not move from $2,290 per metric ton.
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.