Bill’s recap: “Home sales in the USA continues to be soft but most other categories of the econo0my continue to show strength, especially the stock market. Steel mill output climbed back over 80% of capacity and imports remain subdued. Domestic mill expansions continue as SDI contributed with their big announcement. The domestic mills have put out 3 rounds of price increases in the last 30 days. There is plenty of news from the automotive world, from marking the 125th anniversary of the motor race, to full size pickup trucks getting 33 mpg.”
  + Durable Goods Orders jumped 2% in June, driven by new orders for machinery, fabrications, and primary metals. – Existing Home Sales fell 1.7% in June possibly due to prices rising to an average $285,700. The inventory of unsold used homes rose 1% to total 1.93 million units. – New Home Sales fell 3% in June. The average price of a new house was $310,400. The inventory of unsold new homes grew to 6.3 months’ worth. + Gasoline prices are coming down. Crude oil futures remain over $57 per barrel, and refineries are slowing to 93.1% of capacity. AAA National Gas Price Comparison 7:29:19 + Freight rates are moderating. Freight Rates July 30th Pacesetter Newsletter + Trucking companies are wrestling with the hangover from last year’s freight boom as greater availability of big rigs and softening demand weigh on earnings. Many carriers plowed 2018 profits and the gains from the 2017 corporate tax cut into record orders for new equipment, resulting in a growing supply of trucks while cargo volumes in U.S. distribution channels have been sliding. Bad weather, tepid industrial growth and trade tensions have contributed to sagging business, freight executives say. Companies that pulled imports forward late last year ahead of anticipated tariffs are working through excess inventory piled up in warehouses, and cool temperatures put a damper on spring shipments of produce, beverages and patio furniture. “We’re three months into a freight recession,” said Jack Atkins, a transportation analyst with Stephens Inc. It is a sharp reversal from last year, when surging freight volumes and tight truck capacity had retailers and manufacturers scrambling to book transportation. Some companies pointed to soaring shipping costs as the reason for depressed earnings as carriers extracted double-digit rate increases. The average spot market price to hire a big rig was off 18.5% in June from the same month a year ago, to $1.89 per mile, according to online freight marketplace DAT Solutions LLC. Last month on DAT’s platform there were about three loads for every available truck, compared with six loads per truck in June 2018.
– #1 heavy melt scrap is static at $228 per ton as well as #1 busheling scrap at $280 per ton. + Raw steel production rose to 80.4% of capacity. – Iron ore FOB Chinese ports continues to be ridiculously high at $120 per dry metric ton. + The zinc price trend remains in decline. kitco 60 day zinc spot july 30 pacesetter newsletter – It is looking like July galvanized imports will surpass June but either way, the volume is low. US Imports of Sheets and Strip Galv Hot Dipped July 30 Newsletter + Steel Dynamics, Inc. announced the selection of Sinton, Texas, as the site for the company’s new state-of-the-art, electric-arc-furnace (EAF) flat roll steel mill.  Sinton is located approximately 30 miles Northwest of the port of Corpus Christi, Texas.  Sinton is strategically located within the Southwest U.S. and Mexico market regions, bringing numerous competitive customer and raw material advantages to the project.  Final determination is still subject to the anticipated receipt of necessary permits and continued state and local government support, which the company expects to be forthcoming.  The Sinton location brings numerous advantages, including: Proximity to the three targeted customer regions of the four-state Texas area, the Western U.S. and Mexico representing approximately 27 million tons of relevant flat roll steel consumption, Customer-centric logistic benefits, providing shorter lead times and meaningful customer working capital savings, Central to the largest domestic consumption of flat roll Galvalume and construction painted products, with the anticipated ability to effectively compete with excessive regional imports, Sufficient acreage to allow customers to locate on-site, providing logistic savings and steel mill volume base-loading opportunities, Proximity to prime ferrous scrap generation via the four-state Texas region and Mexico, and cost-effective access to pig iron through the deep-water port of Corpus Christi, as well as other alternative iron units, Excellent logistics provided by on-site access to two class I railroads, transloading opportunities with a third class 1 railroad, proximity to a major U.S. highway system, and access to the deep-water port of Corpus Christi, and dependable power, natural gas, and water sources.   + A 3rd round of domestic mill price increases have been announced. Here is an updated list of announcements: Late June steel price increase announcements: June  25th  – Nucor announced effective immediately up $40 ton on all products. June  25th  – USS-Posco announced effective immediately up $40 ton on all products. June  25th  – NLMK announced effective immediately minimum base prices with HRC at $560 per ton and Cold Roll and Galv at $700 per ton. June  26th  – US Steel announced effective immediately up $40 ton on all products. June  26th  – ArcelorMittal informed customers effective immediately up $40 ton on all products. June  26th  – ArcelorMittal Dofasco announced effective immediately up CDN $55 ton on all products.   + 2nd week of July price increase announcements: July 9th  – Nucor announced effective immediately up $40 ton on all products. July 9th  – ArcelorMittal announced effective immediately up $40 ton on all products. July 9th – ArcelorMittal announced a $40 per ton price increase. July 9th – Nucor announced a $40 per ton price increase. July 10th  – NLMK announced effective immediately up $40 ton on all products. July 10th – USS-Posco announced a $40 per ton price increase. July 10th – California Steel announced a $40 per ton price increase. July 10th – Algoma in Canada announced a $40 per ton price increase. July 10th – NLMK announced a $40 per ton price increase. July 10th – US Steel announced a $40 per ton price increase as well.   + 4th Week of July Price Increase Announcements Target:            Hot Roll $31.50 CWT Cold Roll and Galv $39.00 CWT July 22nd – ArcelorMittal informed customer effective immediately of minimum base prices with Hot Roll Coil at $630 per ton and Cold Roll and Galvanized at $800 per ton. July 22nd – Nucor announced effective immediately up $40 ton on all products. July 23rd – NLMK informed customers effective immediately up $40 per ton on all products, Hot Roll at $640 per ton and Cold Roll and Galvanized at $800 per ton. July 23rd – U.S. Steel announced effective immediately up $40 ton on all products. July 23rd – California Steel announced effective immediately up $40 ton on all products. July 23rd – USS-Posco announced effective immediately up $40 ton on all products.  
– Nissan Motor Co. CEO Hiroto Saikawa will slash some 12,500 jobs worldwide as part of new plan to revive the company after reporting a 99% plunge in operating profit in the latest quarter on falling sales in every major market except China. Operating profit was nearly wiped out, tumbling to $14.8 million in fiscal first quarter ended June 30, the company announced in its quarterly results. Operating profit margin shriveled to a 0.1%, compared with 4% a year earlier. Net income dropped 95% to $59.3 million in the April-June period. Nissan’s revenue slid 13% to $21.97 billion in the three months, as global retail volume declined 6% to 1.23 million vehicles. The earnings collapse adds to the sense of crisis enveloping Saikawa, who is simultaneously trying to reform corporate governance at Nissan and smooth relations with French partner Renault. Nissan’s house was thrown into disarray by last year’s arrest of former Chairman Carlos Ghosn for alleged financial misconduct during his time at the helm of the Japanese carmaker.  Saikawa, now presiding over a post-Ghosn era in which Nissan’s U.S. profit engine imploded, wants to rebuild U.S. sales to 1.4 million vehicles in the fiscal year ending March 31, 2023. + The 2020 Chevrolet Silverado 1500 diesel just scored 33 mpg on the highway in EPA fuel economy tests. “That’s rarefied air,” Silverado executive chief engineer Tim Herrick said, pointing out that GM’s new Flint-built 3.0L straight-six Duramax diesel engine gives the Silverado full-size pickup better highway fuel economy than some popular midsize sedans. The 2020 Silverado 1500 diesel should be in dealerships in late summer or early fall. The engine produces 277 horsepower and 460 pound-feet of torque. Its maximum towing capacity is 9,300 pounds. 2020 Chevrolet Silverado + Mazda in 2019 will release the first commercial compression-ignition gasoline engine, dubbed SkyActiv-X. At the core of Mazda’s upcoming range of engines is technology called Spark Controlled Compression Ignition. Currently, gasoline engines ignite their air-fuel mixture with a spark from (aptly-named) spark plugs. The new SkyActiv-X line of engines will break from that process, instead delivering spark-free ignition of the air and fuel mix through compression. If this sounds familiar, it’s because diesel engines do the same thing. The process allows the engine to operate at lower temperatures, which reduces a lot of the heat energy normally lost in gasoline engines. This, in turn, allows Mazda to run with a much leaner air-fuel mix for better fuel consumption and lower emissions. Mazda says the new (proprietary) process combines the benefits of both diesel and gasoline engines, for significant improvements in fuel efficiency. Some other manufacturers have tried to nail the process in concepts, but the narrow temperature range at which compression ignition engines do their best work has caused problems. SkyActiv-X will avoid the issue by operating as a conventional, spark plug-ignited engine when conditions demand it. Compared to the current lineup of SkyActiv-G engines, the SkyActiv-X line should use between 20 and 30% less fuel and yield between 10 and 30% more torque than the current (naturally aspirated) SkyActiv range. + Last week marked the 125th anniversary of the first motor race, held between Paris and Rouen, a distance of 78 miles. The race was organized by Pierre Giffard, editor of Le Petit Journal, the Paris-based newspaper that was at that time, the largest circulation newspaper in the world. Le Petit Journal announced the reliability competition for horseless carriages in December 1893, and 21 cars faced the starter in the Paris suburb of Neuilly-sur-Seine, at 8 am on Sunday, July 22, 1894. The start was reportedly watched by 30,000 spectators, with many more along the roadside. At that time, there were three different motor vehicle propulsion systems vying for public acceptance: the internal combustion engine, which was just eight years old at the time, battery-electric, and steam power. The 78 mile distance, meant that electric cars were effectively ruled out of the competition as battery technology was still in its infancy and, though charging stations were springing up in Paris, the lack of availability of suitable charging on the route to Rouen and the time required to recharge made an electric vehicle uncompetitive. Of the 21 motorcars that competed that day, 15 had internal combustion engines and six cars were steam-driven. While every subsequent genre of motor race (paved road racing, endurance, rally and off-road racing) descends from this common ancestor, this race was more a “reliability trial” to promote the viability of motoring to the public. Reliability trials were commonplace in the first few decades of the automobile, and many a marque made its name in them. Automotive pioneer Gottlieb Daimler and his son Paul were present to witness the event to see how their engines performed: of the 15 internal combustion engines in the race, nine were produced under Daimler’s license.  The winner of that first race was a steam driven De Dion-Bouton steam tractor pulling a single-axle passenger trailer. It averaged 12 mph. 125th anniversary first motor race  
Team Pacesetter Parting Shot July 30 Newsletter

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