Monthly Raw Steels MMI® Holds Steady at 82

Steel prices in the US had consistently increased through much of August, but have begun to stall, while US scrap prices have also slipped slightly – that’s why the monthly Raw Steels MMI® held steady at 82, still down substantially from the January 2012 baseline level of 100.

“Shorter term, we have seen some nice bumps in demand coming from the construction and automotive sectors,” said Lisa Reisman, managing editor of MetalMiner. “But the steel price rally we have seen throughout the bulk of the summer has begun to slip as early September prices have come in lower than August levels.”

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Construction demand, despite appearing positive this summer, has begun to slide. Our friends at Gerdau Market Update show this momentum swing. Of particular importance to the steel sector – overall economic activity – the news remains mixed, with rising interest rates (negative for home sales and that sector which drives our Raw Steels and Construction MMIs), lower capacity utilization, according to Gerdau Market Update (right now around 77%, but on the low end of the “ideal” overall manufacturing capacity range of 75-85%) and overall manufacturing economic growth starting to slow, according to William Strauss, chief economist of the Chicago Fed, who will speak at our upcoming Commodity/PROcurement EDGE conference on Oct. 8.

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Current Price Drivers

The price of Korean steel scrap climbed 10.9 percent to $319.53 per metric ton.

The 3-month price of the US HRC futures contract actually rose 3.8 percent to $628.00 per short ton after falling the previous month. After dropping the previous month, the steel billet 3-month price prices rose 3.2 percent on the LME to $160.00 per metric ton.

The price of Chinese slab rose 1.6 percent to $607.55 per metric ton after falling the previous month. After dropping the previous month, the price of Chinese billet prices rose 0.3 percent to $507.93 per metric ton.

However, at $363.00 per short ton, US shredded scrap was down 4.0 percent for the month.

Prices for Chinese coking coal remained relatively constant this past month, holding at around $223.75 per metric ton. Hovering around $571.56 per metric ton for the month, Korean pig iron remained unchanged.

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.

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