US Construction Outlook: China Steel, Semi-Finished Aluminum Prices Up

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chart of construction sector metals price trends september 2013

Higher Chinese steel prices, particularly for rebar and H-beam, as well as higher semi-finished aluminum prices, drove the monthly Construction MMI® up 2.3% for September – but the outlook for the US construction industry in general appears muted.

Take, for example, the housing market. Whereas existing home sales grew to their highest level in five years, an economic forecast firm that we follow thinks the underlying data presents a more challenging picture, as the housing affordability index has fallen for the past five months. Most other construction data appear negative.

Compare with last month’s trends – here’s our free August MMI® Report.

Our friends at Gerdau Market Update, who track a broad range of construction numbers, had this to say in a recent note: “Overall momentum is negative and with three exceptions was negative across all project categories.”

“Any decline in construction spending will show up in the MetalMiner monthly construction index,” said Lisa Reisman, managing editor of MetalMiner, “due to the materials that comprise this index – and many of them not subject to formal exchanges.”

“Supply and demand will have a greater impact on the index’s performance,” Reisman said.

We at MetalMiner suspect that unless we see some upticks in residential and non-residential construction spending, this index will likely bobble at current levels.

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Drivers of Construction Metals Price Index

European 1050 aluminum prices rose 5.0 percent. Chinese H-beam steel finished the month up 3.9 percent. Chinese rebar prices increased 1.8 percent. Chinese aluminum bar rose 1.1 percent. The weekly US Rocky Mountain bar fuel surcharge increased 0.5 percent.

* Get the complete prices every day on the MetalMiner IndX℠

After rising the previous month, US shredded scrap prices dropped 4.0 percent.

The Chinese low price of 62% Australian iron ore fines remained unchanged. The weekly US Gulf Coast and Midwest bar fuel surcharges remained constant this past month.

FREE Download: The Monthly MMI® Report – covering the metals markets of the Construction sector.

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.