The FT echoed global fears of a steel price crash, highlighting the sustained drops in Chinese steel and iron ore prices. The big concern, according to the article, is that Chinese steel production cuts are not keeping pace with prices. (Check out how production cutbacks — or lack thereof — are affecting another metal market: aluminum.)
The article cited that Chinese steel output increased 1.1 percent in early August to a daily average of 1.9699 million metric tons, according to the China Iron and Steel Association.
On Aug. 21, 2012, the cash price of steel billet fell by 2.8 percent on the LME, landing at $350 per metric ton and making it the day’s biggest mover on MetalMiner’s daily steel price index. The 3-month price of steel billet saw a 2.2 percent decline on the LME to $355 per metric ton.
Chinese steel prices were mixed for the day. The high and low prices of iron ore 58% fines from India remained rangebound, while Chinese slab finished the day down 0.8 percent. At above $560 per metric ton, the price of Chinese HRC was essentially unchanged.
The US HRC futures contract 3-month price remained essentially flat at $650 per short ton. The spot price of the US HRC futures contract saw little movement on Tuesday, closing out around $645 per short ton.