The monthly Raw Steels MMI® registered a value of 85 in April, on par with March’s value.
Like any other industrial metal during the past few years, Euro-zone problems and the cooling of the Chinese economy have impacted steel demand. Moreover, expansion of domestic facilities and competition in the US from cheaper imports have led to oversupply of steel compared to demand.
Although future demand for steel looks optimistic, it is hard to predict how this will actually change the current scenario and how the marketplace will take it. In the near term, steel prices are far from being strong and nothing indicates an immediate upward turn.
In the very short term, prices might gain some support as some manufacturers seem to be increasing steel prices. However, for the next few months we don’t expect prices to increase above the levels they recorded in January.
What This Mean For Metal Buyers
Steel prices could gain support in the short term, but for the next few months we don’t expect prices to be well above today’s levels. We would recommend buyers wait for bullish signals before taking long-term positions.
Following a 11.1 percent upswing on the LME, the 3-month price of steel billet closed the month at $400.00 per metric ton. After dropping the previous month, the steel billet cash price prices rose 9.9 percent on the LME to $390.00 per metric ton. The US HRC futures contract 3-month price rose 2.4 percent to $635.00 per short ton after falling the previous month. After dropping the previous month, the spot price of the US HRC futures contract prices rose 1.9 percent to $639.00 per short ton.
Following a 4.8 percent decline in price, Korean steel scrap finished the month at $277.58 per metric ton. The value of US shredded scrap weakened by 1.0 percent this month, settling at $391.00 per short ton.
Chinese billet traded sideways last month, staying around $500.21 per metric ton. The price of Chinese coking coal held steady around $223.57 per metric ton last month. Korean pig iron experienced a flat month, staying around $597.51 per metric ton. Hovering around $559.72 per metric ton for the month, Chinese slab 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.