Construction MMI: Metal prices bounce back, steel imports fall

The Construction Monthly Metals Index (MMI) picked up by 6.0% for this month’s reading, as rising metal prices push up the cost of doing business in the construction sector.

April 2022 Construction MMI chart
Source: MetalMiner Insights

Construction costs rise with metal prices

As MetalMiner’s Don Hauser (VP, business solutions) explained during a recent ROTH Capital webinar, steel buyers should keep an eye on import trends.
U.S. steel prices had retraced downward from an October peak. However, upward price momentum has renewed for steel.
“If you look at when steel prices peaked … the steel market peaked in October and you can see in November is when everything started hitting the shores and being delivered,” he said.
Imports remained high in November, December and January. Meanwhile, imports declined by 23%, according to the American Iron and Steel Institute (AISI).
“If you look at when steel prices peaked … the steel market peaked in October and you can see in November is when everything started hitting the shores and being delivered,” he said.
Hauser added that steel market dynamics can have far-reaching impacts.

“Steel is really kind of liquid,” Hauser explained. “It moves around so it’s not necessarily something happens in one place and it only affects that market. … You’re seeing that right now, prices were falling down to close to $1,000 a ton. Now they’re ramping back up.”
Keep up to date with the underlying price changes in the MMIs through the MetalMiner Insights platform, which includes key construction material price points. 

Steel imports

From a construction-specific perspective, however, imports of steel rebar increased from January to February.
Rebar imports totaled 139,171 tons in February, up 96% from January.
Meanwhile, imports of wire rod declined by 23.5% to 102,918 tons.
The forthcoming Raw Steels MMI will include additional analysis of steel market trends. Revisit what the MetalMiner team said in last month’s MMI report

ABI growth continues

The Architecture Billings Index (ABI), a leading indicator of nonresidential construction activity, showed growth once again.
The February ABI checked in at 51.3. (Any reading greater than 50 indicates billings growth.)
Meanwhile, the January ABI came in at 51.0.
“This month marks one full year since the recovery began at architecture firms, following the pandemic-induced downturn that started in 2020,” this month’s ABI report stated. “While billings growth has slowed from the explosive pace of mid-2021, the majority of firms are still reporting steady growth. In addition, inquiries into new projects and the value of new design contracts both remain strong, indicating ongoing interest from clients in starting new projects.”
By region, the South led the way with a score of 58.6. The Midwest came in second (53.2), followed by the West (47.9) and Northeast (44.3).
In this month’s ABI survey, architecture firms weighed in on supply chain disruptions.
Of the respondents, 79% indicated supply chain disruptions are impacting their firms more than a year ago.

Construction sector adds jobs

The construction sector added 19,000 jobs from February to March.
Despite the rise in employment and the ongoing rises in construction spending, the Associated General Contractors of America said, progress is in danger without improvements in ability to procure materials.
“Construction is contributing significantly to the expansion of employment and the overall economy,” said Ken Simonson, the association’s chief economist. “But the sector is facing growing challenges in terms of filling job openings, obtaining materials, and keeping up with soaring wages and prices.”

Actual metal prices and trends

The U.S. shredded scrap steel price rose 26.4% month over month to $609 per short ton.
The Chinese rebar price rose 2.2% to $785 per metric ton. Meanwhile, Chinese H-beam steel fell 0.5% to $786 per metric ton.
Chinese aluminum bar fell 0.8% to $3,741 per metric ton.

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