The monthly Raw Steels MMI® registered a value of 84 in July, on par with June’s value.
Our steel price index has remained remarkably flat in the first half of the year. Steel demand looks optimistic for some, but not so for others. The US steel industry had better-than-expected performance during the second half of 2013, but a bright future is far from certain.
A recent recovery in China, thanks to support from some stimulus measures taken by its government, might give support to steel prices this year. It is hard to tell if this stimulus will be able to make the Chinese economy reach its pre-crisis level. Since we don’t see any particular event that could boost demand for steel this year, we would expect our steel index to move together with the base metal sector.
In this manner, macroeconomic factors such as the US Dollar, Chinese and US economy will play a big role in the performance of commodities during the second half of 2014. If commodities manage to perform well in this second half we will likely see metals such as aluminum and copper finally turning around and our steel index won’t be the only one falling over itself to catch up.
What This Means For Metal Buyers
Flatness for half of the year for our steel index could be changing. Keep an eye on commodities and the rest of industrial metals as they will give us clues for steel. We’ll probably see a more exciting second half.
The US HRC futures contract 3-month price saw its value rise 1.9 percent to $635.00 per short ton. After a 1.3 percent increase on the LME, the steel billet cash price finished the month at $395.00 per metric ton.
A 3.9 percent decline for US shredded scrap left the price at $370.00 per short ton. Last month, the US HRC futures contract spot price dropped 2.7 percent to $652.00 per short ton. The price of Korean steel scrap drifted 1.9 percent lower to $256.90 per metric ton.
Hovering around $400.00 per metric ton on the LME for the month, the steel billet 3-month price remained unchanged. Hovering around $501.25 per metric ton for the month, Chinese billet remained unchanged. Chinese coking coal traded sideways last month, staying around $224.03 per metric ton. Last month was consistent for Korean pig iron, which did not move from $627.44 per metric ton. Chinese slab held pat last month at $560.88 per metric ton.
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.