Falling HRC Prices, Construction Spending Hit Monthly Steel Index

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MetalMiner Monthly Raw Steels Price Index March 2013 chart

MetalMiner’s raw steels price index slipped two points this month to 89 due to falling HRC prices, both on the exchanges (LME and CME) as well within transactional price markets for the US and China.

“The US steel industry still looks like a mixed bag to us,” said Lisa Reisman, managing editor of MetalMiner. “For example, the ABI (Architecture Billings Index) showed growth in January and consumer confidence also showed growth in February, but mill capacity utilization fell to 77.5 from 80.4 one year ago for the week ending March 2.”

Certain sectors have momentum (e.g. housing, oil and gas, particularly rig counts), automotive and service center measures of MOH (months-on-hand inventory) still appears slightly below historical averages, but US industrial construction spending appears to be running lower than 2012 figures for the same point in time (January), potentially offset by rising Canadian industrial construction spending.

The impact of the March 1 sequestration may also negatively impact the steel sector.

Primary Price Drivers of Steel Index

Korean pig iron prices tumbled 12.1 percent. The cash price of steel billet dropped 11.1 percent on the LME to $240.00 per metric ton. After remaining essentially unchanged the previous month, the price of US shredded scrap fell 3.9 percent. The spot price of the US HRC futures contract closed the month down 3 percent at $614.00 per short ton. For the second month in a row, the 3-month price of the US HRC futures contract declined, falling 1.1 percent over the past month to $638.00 per short ton. Chinese billet prices dropped 1.5 percent.

Chinese coking coal traded sideways last month, dropping just a few cents per ton. Last month was rather consistent for Chinese slab, which moved downwards just a tad.

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 over a 30-day period. 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.