MetalMiner’s monthly Raw Steels MMI® – tracking finished steel and raw material prices across global markets – remained flat in February at 87 points.
Although steel prices have been rising since June 2013, they are still far from reaching their 2011 levels. We have remained a bit skeptical of this last uptrend, as we commented in previous MMI reports, when steel prices were losing momentum. It is too early to call for lower steel prices until we see prices going down, but we certainly don’t expect steel prices to go much higher.
Why? We look to the Dow Jones US Steel Index, among other things…
Key metal price drivers appear to be pointing the way to more metal weakness, as the dollar keeps strengthening and demand not looking very strong.
A good benchmark for steel prices is the Dow Jones US Steel Index, which tracks major steel producers around the globe. We can see in the chart below how the index has begun to weaken since the start of 2014. If the index indeed goes down, we would expect steel prices to move with it.
What This Means For Metal Buyers
Steel prices seem to be flattening. With all base metals trending down or flat at best, we don’t expect steel prices to go much higher. However, until we see more price weakness, we remain cautious.
Key Price Drivers of the Raw Steels Index
It was a strong month on the LME for the steel billet 3-month price. The metal posted a 26.3 percent increase, finishing at $360.00 per metric ton. Last month, the steel billet cash price rose 23.7 percent on the LME to $365.00 per metric ton. The price of US shredded scrap jumped 3.2 percent last month.
The price of Korean steel scrap fell 4.5 percent. After falling 3.6 percent, Chinese slab finished the month down. Last month, the spot price of the US HRC futures contract dropped 3.0 percent to $655.00 per short ton. Chinese coking coal prices decreased by 2.8 percent this month. Korean pig iron fell a slight 1.6 percent over the past month. The 3-month price of the US HRC futures contract ended the month at $629.00 per short ton, down from $629.00.
Last month was consistent for Chinese billet, which did not move.
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.