The Chinese steel market is looking up again.
One sign lies in Fortescue Metals Group’s iron ore shipments rising by 32 percent in the December quarter from a year ago, “nearly all bound for Chinese steel mills,” as reported by Reuters. Fortescue’s shipments rose to 19.6 million metric tons in the three months to Dec. 31, 2012, from 14.8 million in the same period a year ago, according to the company. The company also expects “volatile market conditions in China to stabilize in the near term.”
This does have the potential of happening — China’s HSBC flash purchasing managers’ index (PMI) is reported as having increased to 51.9 in January, the highest since January 2011.
Another sign is that after a 6.6 percent week-on-week improvement on MetalMiner’s Raw Steels MMI®, Chinese billet ended up being the week’s biggest price mover. After a 0.5 percent decline, Chinese slab closed out the week down a bit, but Chinese HRC rose 0.2 percent over the past week. (Chinese coking coal traded sideways last week.)
The price of iron ore 58% fines from India remained rangebound, but Australian 62% fines prices increased.
Cyclone season has taken its toll on iron ore shipments, therefore bumping up prices. The FT reported that the price rally has been driven by shutdowns at Port Hedland, the world’s most important iron ore port, which was “closed for about 24 hours, while Rio Tinto’s port operations at Cape Lambert and Dampier have also been forced to shut down as Cyclone Peta passed.”
Korean steel prices were up for the week. In the past week, the price of Korean steel scrap shot up 4.3 percent. Korean pig iron prices ticked up 1.4 percent.
In Western Steel Markets
Last week, the cash price of steel billet shifted slightly on the LME, rising by 0.7 percent to close at $282.00 per metric ton. Closing at $285.00 per metric ton, the 3-month price of steel billet remained unchanged on the LME for the week.
The 3-month price of the US HRC futures contract fell 0.8 percent for the week to settle at $645.00 per short ton. Since last week, the price of the US HRC futures contract spot price fell to $633.00 per short ton after moving 0.3 percent.
In the past week, US shredded scrap saw its price shift up 0.3 percent.
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.