Monthly Construction Index Falls on Murky Outlook

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The monthly Construction MMI® registered a value of 88 in November, a decrease of 1.1 percent from 89 in October.

Construction_Chart_November-2013_FNL

The outlook for the US construction industry in general looks blurry.

The last report released by our friends at Gerdau Market Update, who track a broad range of construction numbers, shows some less than optimistic data. Non-residential construction starts, for example, have shown slow and steady growth since the end of the recession. Nevertheless, the rate of change has decreased considerably, denoting a slowdown in the rate of growth and causing concern going forward.

Industrial construction starts increased by 16.2%%, 3 months y/y, however it has also seen a downward trend by 20.7% over the last 12 months, primarily due to a 60.7% drop in the total value of power project starts.

U.S. raw steel production and capacity utilization from January through October 19 has dropped by 2.16% compared to the same period last year. U.S. raw steel production remains below 2007 levels and pre-recession utilization levels will likely not go much higher until non-residential construction picks up.

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Finally, the issues that the Federal Government has had in resolving the ongoing fiscal crisis has created uncertainty, impacting the country’s confidence.

With a 2.3 percent decline, the weekly US Rocky Mountain bar fuel surcharge closed the month at $0.53 per mile. The weekly US Gulf Coast bar fuel surcharge ended the month at $0.53 per mile, down from $0.53. The weekly US Midwest bar fuel surcharge saw a small decline this month, falling from $0.51 to $0.51 per mile. At $2,823 per metric ton, European 1050 aluminum was down 1.6 percent for the month. Chinese H-beam steel prices fell 1.4 percent to $562.67 per metric ton after rising the previous month.

Chinese rebar shifted up 0.9 percent last month to settle at $575.79 per metric ton. US shredded scrap prices increased from $356.00 to $358.00 per short ton last month.

Prices for the Chinese low price of 62% Australian iron ore fines remained constant this past month, holding at around $159.12 per dry metric ton. Hovering around $2,329 per metric ton for the month, Chinese aluminum bar remained unchanged.

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.

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