shutterstock_62976484I happened to see the ticker this afternoon that the largest U.S. steelmaker by market value, has reported first-quarter earnings that beat the estimates many analysts’ had. Part of the reason could be because steel’s price increased. Didn’t I say that last week? Refer back if you don’t remember, anyhow, the company with these earnings was 
Nucor.  You can read more about their financial report by clicking here. What’s interesting here is that while those prices increased we also saw an increase in U.S. construction spending by 9.1 percent.  Those figures come from the latest U.S. Census Bureau data. For those that didn’t know, but I am sure you do, building and construction use about half of the steel consumed in the glorious United States of America. So here is the real struggle I have with this, normally given macroeconomics conditions if we have an increase in demand (construction spending was up 9.1%) then we should have some price drops. However, with other manufacturers like US Steel decreasing their output because of “operational problems” prices continued to edge higher. I, however, think all is healthy as long as construction spending can continue to be ahead of the price of hot-rolled steel coil then things will be just fine for everyone. Disagree with me? Then tell me why? FYI price of hot-rolled steel coil rose 6 percent from a year earlier and construction spending is up 9.1%, that gives us a 3.1% window. Still disagree with my assessment of where the industry is?