While daily prices for steel and its raw materials inputs markets stayed flat, weekly prices on MetalMiner’s steel price index showed some movement as China’s steel industry sees a positive outlook for the future.
The main reasons for that outlook “are that steel demand has picked up gradually, steel mills have controlled production well and iron ore prices have fallen,” Wang Xiaoqi, deputy head of the iron and steel association, told the Financial Times. “I’m also positive about the first quarter of next year,” he was quoted as saying.
The article continued, “Mr. Wang cited new railway and highway projects and rising fixed-asset investment as reasons why steel demand will pick up in the fourth quarter. Beijing has boosted railway investment for the year to Rmb630bn, from an earlier budget of Rmb516bn, contributing to steel demand.”
On MetalMiner’s weekly Raw Steels MMI®, US shredded scrap rose 13.1 percent to finish as the week’s biggest mover. Iron ore prices look to keep moving as well — for a while.
In iron ore news, Roskill Information Services Ltd. recently released a report stating that the iron ore industry is to remain turbulent through 2020, citing
- Increased concentration, vertical integration and foreign ownership as being likely — Rio Tinto, BHP Billiton and Vale (the “Big Three”) will increase their share of seaborne trade as emerging producers won’t be able to easily secure capital
- New capacity will exceed growth in demand and force high-cost operations out of the market
- Demand for steel is expected to grow at a slower rate — rising demand from other emerging nations is unlikely to fully offset the slowing pace of growth in the intensity of steel use in China
- And prices are likely to remain volatile
On the MetalMiner IndX℠, Chinese steel prices were mixed for the week.
The high and low prices of iron ore 58% fines from India remained tightly range-bound in the mid-$130s per dry metric ton. However, in the past week, the price of Chinese HRC shot up 4.4 percent. The price of Chinese coking coal kept relatively steady, while closing out the third week of rising prices, the price of Chinese steel slab increased by 0.8 percent.
LME steel billet cash prices reversed a freefall and rose 1.5 percent to $304.50 per metric ton after falling 13 percent during the previous week. The 3-month price of steel billet rose 0.2 percent on the LME to $305.50 per metric ton after falling 14.1 percent during the previous week.
Korean steel scrap saw a 1.6 percent decline over the past week, but prices for Korean pig iron remained constant.
The US HRC futures contract 3-month price shifted up 1.5 percent to close at $660.00 per short ton this week. At $618.00 per short ton, the spot price of the US HRC futures contract remained essentially flat.
The Raw Steels MMI® collects and weights 13 global steel and raw material price points to provide a unique view into global steel price trends. For more information on the Raw Steels MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.