The monthly Raw Steels MMI® dropped 2.2 percent from March to April.
The raw steels price index shed two points from 89 to 87, as a result of nearly across-the-board price drops for a whole range of steel prices that feed into the index. From billet to slab, to HRC and pig iron, the complex drifted with US scrap prices providing the only price support.
“Though March saw some price increases for scrap, most of the metals trade press has reported downward scrap price pressure from $10-22/ton,” said Lisa Reisman, managing editor of MetalMiner. “Steel-making raw materials have become fungible to some extent, so we tend to see price trends move closer together.”
Steel markets continue to face headwinds with European and Asian demand down, and only the US holding steel markets up with rebounding construction spending.
For the week ending March 30, the US steel capacity utilization rate reached 75.9%, whereas the one-year-ago time period saw a capacity utilization rate of 79.6%. Lackluster demand in the US will continue to weigh on the raw steels index.
Price Drivers of the Steel Index Drop
On the LME, the 3-month price of steel billet crashed 26.8 percent over the past month to $205.00 per metric ton. The steel billet cash price also fell hard by 22.9 percent on the LME over the past month to $185.00 per metric ton, the second straight month of declines.
Chinese coking coal was down 9.5 percent for the month. The price of Chinese slab fell 3.3 percent. The 3-month price of the US HRC futures contract closed the month down 3.1 percent at $618.00 per short ton. The spot price of the US HRC futures contract declined 0.8 percent over the past month to $609.00 per short ton. The US price of Korean steel scrap dropped as well.
Korean pig iron experienced a flat month in its local market, but its US price dropped. However, US shredded scrap finished the month up 7.8 percent. After a 0.3 percent increase, Chinese billet finished the month up slightly as well.
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.