US shredded steel scrap prices drove MetalMiner’s monthly Raw Steels MMI® down to 85 in March, a decrease of 2.3 percent from 87 in February.
Although steel prices have risen since June 2013, during the end of the year we gave reasons why we doubted that prices could go further up. Since the start of the year, prices started to flatten and we began suspecting that prices would weaken for the reasons reported in our previous Raw Steels MMI®.
Iron ore prices seem to be falling as well, dropping 13 percent this year alone. Both iron ore and steel inventories have increased, having a depressing impact on production, which has consequently slowed down. As my colleague Stuart points out: “High finished steel inventory levels are going to take some time to clear in a low-commodity-growth environment. Steel production is therefore likely to slow further before a pickup possibly later in Q2.”
We wouldn’t expect steel prices to strengthen at least through the first half of the year.
What This Means For Metal Buyers
Steel prices seem to be weakening. With all base metals trending down or flat at best, we don’t expect steel prices to go well above today’s levels at least through the first half of the year.
As far as the last month’s price movements go, the price of US shredded scrap closed the month after dropping 6.6 percent.
The US HRC futures contract spot price closed the month at $627.00 per short ton after dropping 4.3 percent. After rising the previous month, billet cash prices dropped 2.7 percent on the LME to $355.00 per metric ton. Korean steel scrap prices decreased by 1.6 percent this month.
Hovering around $360.00 per metric ton on the LME for the month, the 3-month price of steel billet remained unchanged. The price of Chinese billet held steady. Chinese coking coal remained unchanged. Prices for Korean pig iron remained constant this past month. Chinese slab experienced a flat month.
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.