China’s factory activity dropped to its lowest rate in 7 months, and global markets such as Japan’s Nikkei index reacted.
As new orders fell in China, with the flash PMI reading for May ending up at 49.6 (from 50.4 in April), Ben Bernanke said the US Federal Reserve will be “tapering its bond-buying program earlier than expected, eroding liquidity and investment capital available for metals,” according to a Reuters article.
So of course, steel demand is of primary concern for that metal’s buyers – however, Reuters’ Andy Home commented earlier today that China still has quite the appetite for raw materials (iron ore, coking coal, etc.) over refined metals.
Current Steel and Raw Material Input Prices:
The biggest mover this week on the LME was the 3-month price of steel billet with a 6.2 percent fall on MetalMiner’s weekly Raw Steels MMI® to close the week at $150.00 per metric ton. The steel billet cash price saw a 5.8 percent drop-off this week on the LME to $130.00 per metric ton.
Chinese steel prices were mixed for the week. The price of iron ore 58% fines from India inched just a bit higher. Closing out the third week of declining prices, the price of Chinese HRC dropped by 1.4 percent. Following a steady week, prices for Chinese coking coal closed flat. For the third week in a row, the price of Chinese slab dropped, falling 0.8 percent.
The price of US shredded scrap fell 3.2 percent over the past week. This was the fourth week in a row of declining prices. With a 1.2 percent decrease, the 3-month price of the US HRC futures contract closed the week at $600.00 per short ton. The US HRC futures contract spot price fell 0.9 percent over the past week to $578.00 per short ton. This was the third week in a row of declining prices.
Korean steel scrap remained unchanged for the week. Korean pig iron remained essentially flat as well.
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