Unfortunately because Metal Miner’s new IndX has only just been launched this week, subscribers have not been able to track global metal prices prior to today. But with the benefit of our data base, built up over many months of IndX development, we have been tracking the fall in steel prices in Asia since their peak in early July. Since then, steel prices have halved in China, moving much faster and more dramatically than prices in North America.Ã‚Â Though the decline in stainless prices has been widely reported all year it has only hit the headlines in recent weeks that steel prices in China have also been falling, due toÃ‚Â the credit crunch. But we believe the downturn started in China before the credit crunch, driven more by the fall in the stock markets hitting consumer demand for cars and housing. Prices have dropped by about 40% across the whole range of semi finished products from slab/billets through to CR coil/wire/beams/coated coil.
One wonders if Vale would have been so bullish in pushing for increases in iron ore prices just weeks ago if they had been tracking what was happening to steel prices in the local markets. If prices have been dropping so steadily and consistently in a market the size of China what does that tell you ” especially when raw material costs in the form of iron ore and coal were at historic all time highs, putting producers under immense pressure to keep prices up. It says that demand has dropped out of bed. Is that a good time to be pushing for further raw material price increases, just as the market is about to tank? Apart from the damage it does to the supplier-client relationship (never strong in the iron ore market admittedly) it means you have to back track within weeks or months of your price initiative. Vale should be subscribers to the MetalMiner IndX(SM), they would find, as many North American corporations are, that visibility into the local metal markets in Asia let you see the story unfolding instead of reading about it weeks later after it has happened.