Mortgage Rates Temper S&P/Case-Shiller Index; China Rebar Price Down

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Although the Standard & Poor’s/Case-Shiller Index showed an only marginal decrease in home prices from May to June of this year, further increases at current rates look unsustainable.

According to an article in SFGate, “mortgage rates have climbed more than a full percentage point since May. The increase has already slowed sales of new homes in July. And economists expect it could drag re-sales lower in August…mortgage rates began to rise after Federal Reserve Chairman Ben Bernanke first signaled that the Fed might reduce its bond purchases later this year.”

Although some economists see the US housing market as fundamentally supported, we’ll have to wait and see how much the US construction market as a whole picks up.

Construction Sector Metals Price Trends

The biggest mover on the weekly Construction MMI® was the price of Chinese rebar, which saw a 1.1 percent decline. This comes on the heels of a 0.6 percent increase the week before. The Chinese low price of 62% Australian iron ore fines stayed essentially flat.

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US shredded scrap remained unchanged for the week. Prices for Chinese H-beam steel remained constant.

Chinese aluminum bar prices held steady from the previous week. The week finished with no movement for European 1050 aluminum.

The weekly US Gulf Coast bar fuel surcharge shifted up 0.6 percent. A 0.3 percent gain landed the weekly US Midwest bar fuel surcharge higher. The weekly US Rocky Mountain bar fuel surcharge rose 0.3 percent as well, after falling 0.4 percent during the previous week.

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