Roofing flux prices in the US Gulf coast increased in October following gains in US housing construction and higher crude prices.
Roofing flux prices in the US Gulf coast rose to $512.50/st in October from $505/st in September on stronger demand and rising production costs. WTI crude futures reached $93.68/bl in late September amid October roofing flux price negotiations. This was the highest WTI has been since August of last year.
Housing starts were at a seasonally adjusted annual rate of 1.372mn units in October, 1.9pc higher than September but 4.2pc lower than October 2022, according to data from the US Census Bureau and the Department for Housing and Urban Development (HUD). Housing starts have grown for two straight months, but October's growth was smaller than September's.
Single family starts were at a rate of 970,000 units, just 0.2pc above September but 13.1pc higher than October 2022. The single-family construction market has shown signs of genuine recovery from the sharp declines that occurred in the second half of 2022, when rising interest rates from the Federal Reserve started to weigh heavily on construction and home buying.
Now a over a year into the Fed's push to raise interest rates, housing starts and permits have seen uneven growth but a relative improvement starting in the late summer. That month-to-month growth is starting to level off.
Despite the month-over-month flux price increase and reports of stronger demand, Gulf coast flux prices were roughly 16pc below 2022 levels when asphalt prices reached a 14-year high on a supply crunch.
Midwestern roofing flux prices held steady in October at $475/st from September and were about 9pc below prior year levels. Some roofing market participants expect flux demand to stay strong through the fourth quarter but anticipate a downturn in early 2024 as high interest rates continue to pressure new construction.
In contrast, asphalt shingle producer Owens Corning expects US housing starts to grow in 2024 as current homeowners stay in lower-rate mortgages and new homebuyers turn to new residential construction.
Permits were at a seasonally adjusted annual rate of 1.487mn units in October, 1.1pc above September but 4.4pc below October 2022.
Single family permits still continued the month-to-month growth that's lasted all year, but they grew by the smallest percentage since January 2023. Single-family permits were at a rate of 968,000 units in October, just 0.5pc above September but 13.9pc higher than October 2022.
