Global raw steel production dropped 2.4 percent in April, based on information gathered from steelmakers in 63 countries by The World Steel Association in Brussels, Belgium. The 132,116 metric tons of raw steel produced in April was 1.2 percent higher than figures from April 2012, and brings 2013 totals to 521,283,000 metric tons, 1.9 percent higher than the 2012 year-to-date figure.
China led production with 65.65 million metric tons, trailed by the European Union (14.066 million metric tons), Japan (9.2 million metric tons), and the U.S. (7.258 million metric tons).
Although production figures have dropped, The World Steel Association forecasts a 2.9 percent rise in demand over 2013, following a 1.2 percent rise in 2012.
Despite the drop in global raw steel production, steel shipments in North America increased their total delivery figures and daily shipment rates in April. According to the Metals Service Center Institute’s Monthly Activity Report, metal service centers delivered a total of 3,629,500 tons for the month, an increase of 5.9 percent from the 3,428,100 tons delivered in March. The daily shipment rate rose to 165 tons/day from 163.2 tons/day.
The year-to-date figure of 14,068,700 tons shipped shows a slight drop of 4.5 percent from the same period in 2012.
U.S. Manufacturing Production Slows in May
New manufacturing data reveals that business conditions contracted in May, while U.S. factory activity slipped to a seven-month low during the month. The decline is linked to weak export demand and fiscal impact.
Data collected from May 13 to 22 indicates that the Markit flash U.S. Manufacturing Purchasing Managers’ Index (PMI) hit its lowest reading since October 2012, falling from 52.1 in April to 51.9. PMI readings above 50 signal an improvement from the previous month, whereas readings that fall below 50 show a decline. This month, manufacturing output was the weakest in 2013 so far, slipping from 53.7 to 52.7. The index also indicates that job creation is at a seven-month low, dropping from 53.2 to 52.2.
“Slower growth could be linked to a combination of fiscal drag hurting demand at home while at the same time many export markets remain in fragile states. The latter led to a renewed decline in export orders in May,” Markit’s Chief Economist Chris Williamson said on the findings.
“There was also disappointing news in relation to job creation. With employment growing at the slowest rate since last October, the survey suggests that the Fed cannot risk tapering its stimulus anytime soon.”
A separate May Empire State Manufacturing Survey indicates that general business conditions fell into the negative to -1.4, the first negative reading since January 2013. While 25 percent of survey respondents reported that conditions improved in May, 26 percent said business conditions had worsened. Part of the decline is attributed to a decrease in new orders and shipments. Although the survey indicated a small increase in employment levels, it also revealed that the level of optimism among New York manufacturers declined, with the six-month outlook generally lower this month.
Housing Market Hits Highest Levels Since 2009
Sales of existing homes rose 9.7 percent in the past 12 months, with 4.97 million sold. The number is the highest the market has seen since November 2009.
A jump in home sales is typically associated with the Spring season, but there are numerous reasons why this particular rise is significant. In particular, sales of foreclosed homes have dropped to 18 percent from 28 percent in April 2012. Homes are also selling twice as fast, with half moving within 46 days, versus 83 days last year.
The number of homes for sale in April 2013 has also risen 12 percent over the previous month — the third straight month of inventory expansion after seasonal adjustment. However, the total inventory of remains tight at 2.16 million. According to the Washington Post, this has encouraged builders to increase new constructions, resulting in the highest number of new homes in five years.
China Manufacturing Contracts
Preliminary data from HSBC’s China Manufacturing Purchasing Managers’ Index shows a contraction this month. The index fell to 49.6, compared with a final reading of 50.4 in April. Figures below 50 represent contraction.
China’s gross domestic product (GDP) grew at 7.7 percent in the first quarter 2013, down from 7.9 percent in Q4 2012. Despite performing below economists’ forecasts, the growth exceeds the government’s annual target of 7.5 percent. “The cooling manufacturing activities in May reflected slower domestic demand and ongoing external headwinds,” said HSBC economist Qu Hongbin.
The early data is based on 85 to 90 percent of total responses. The final number will be released later this week.
Despite the slowdown, the trade gap between the U.S. and China grew, according to the latest figures from MAPI (Manufacturers Alliance for Productivity and Innovation). Chinese exports jumped by 19 percent to $484 billion. The trade surplus rose by $175 billion, a 28 percent increase.
The U.S. imports six times more goods from China than it sells to the country. In the first three months of 2013, U.S. imports were increased by $3.6 billion over the same time 2012, to $95.2 billion, while exports to China rose by $1.5 billion, to $16.8 billion.
Jobless Claims Drop
Latest figures from the U.S. Dept. of Labor show a decrease in initial unemployment insurance claims. New claims for the week ending May 18 reached 340,000. This number is down 23,000 from the previous week. Seasonally adjusted insured unemployment rate for the week ending May 11 was unchanged at 2.3 percent, or 2,912,000.
The four-week moving average of insured unemployment was 2,995,250, a decrease of 23,750 from the previous week’s revised average of 3,019,000.
According to the L.A. Times, jobless claims of less than 350,000 each week means the labor market is growing moderately. The U.S. economy added 165,000 new jobs last month, dropping the unemployment rate to 7.5 percent.
Despite the improvement, Federal Reserve Chairman Ben Bernanke called the job market “weak overall,” but added that signs of improvement could lead to cutting back on the Fed’s more than $85 billion per month bond-buying program.