Monthly Construction Index Falls on Murky Outlook

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Commodities, Metal Prices, Premium

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


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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