Chinese Steel Still Bad Guy, Nucor Warns; Playing Field Un-Level

Nucor Corp.’s CEO John Ferriola urged policymakers in DC to be more proactive with cracking down on China’s unfair trade practices, after Nucor reported its earnings yesterday.

We’ve reported recently on how it’s still hard to compete on a level playing field with China – and getting harder.

Nucor’s steel price outlook is positive, however, according to their earnings statement:

“We currently expect to see a modest improvement in earnings for the third quarter of 2013. We expect to see improvements in sheet steel pricing, which dropped to its lowest level since November 2010 in June but has since begun to slowly rebound. Margins on sheet steel have followed a similar trend and are slowly recovering from lows in the second quarter. The automotive and energy markets remain strong, while the construction market remains challenged. We also expect to see increased earnings from our downstream businesses in the third quarter, continuing the upward trend observed in the second quarter.”

Whether that outlook holds for the entire industry in the future remains to be seen…

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Current Global Steel Prices

Following a two-day decline on the LME, the cash price of steel billet climbed up 5.3 percent to end at $100.00 per metric ton on Thursday, July 18. Just off of a 30-day low of $125.00 per metric ton, the steel billet 3-month price rose 4.2 percent yesterday on the LME.

The price of iron ore 58% fines from India remained largely rangebound. The price of Chinese HRC finished the market day up 1.1 percent per metric ton.

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The price of Chinese coking coal remained essentially flat.

For the fifth day in a row, the 3-month price of the US HRC futures contract remained essentially flat at $610.00 per short ton. The spot price of the US HRC futures contract saw essentially no change for the fifth day in a row, remaining around $635.00 per short ton.

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