AGC Reports Historic Construction Spending, China Exports Hit Prices, Metals Index Flat

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The monthly Construction MMI® registered a value of 89 in March, on par with February’s value, reflecting a market still wary of large risks despite the economic recovery, as big projects such as California’s high-speed rail expansion continue to lag.

A surprise drop in exports swung China’s trade balance into deficit last month and amplified fears of a slowdown in the world’s No. 2 economy, according to Reuters. Chinese exports fell 18.1 percent in February from a year ago, while the market had been expecting an increase, causing several Chinese metals to trade lower.

In a good sign, data from the Associated General Contractors of America (AGC) valued all spending in January at $943 billion, a 9.3 percent rise compared to January 2013. It was the fastest rate of growth for total construction spending since May 2006, the AGC said. The January figure was also up about one-tenth of a percent from December.

March 2014 Construction Outlook.

March 2014 Construction Outlook.

The initial estimate for December was revised upward from its original valuation by about $12 billion. Private residential construction spending increased by 1.1 percent in January and jumped 15 percent over the last 12 months.

After rising 3.4 percent, the weekly US Rocky Mountain bar fuel surcharge finished strong for the month. The weekly US Gulf Coast bar fuel surcharge rose 1.2 percent.

European 1050 aluminum saw its price rise 0.6 percent. The European Union lodged a formal complaint at the World Trade Organization recently against China’s imposition of anti-dumping duties on imports of stainless steel tubes, six months after Japan filed a similar case, the WTO said, a move that could negatively affect both markets.

The complaint centers on high-quality steel products that China needs to build new power plants, crucial for its plans to upgrade and clean up its electricity infrastructure, Reuters reported.

Other Price Drivers

After falling 6.6 percent, US shredded scrap finished the month down. The price of Chinese rebar fell 3.8 percent.

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Prices for the Chinese low price of 62% Australian iron ore fines remained constant this past month. Last month was consistent for Chinese aluminum bar, which did not move much. The price of Chinese H-beam steel held steady.

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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.