Monthly Raw Steels MMI® Flat, While Nucor Stock Hits a 6-Year High

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Raw-Steels_Chart_September-2014_FNL

MetalMiner’s monthly Raw Steels MMI® registered a value of 85 in September, on par with August’s value.

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Despite the flatness of our steel MMI this year, some indicators are pointing to a brighter rest of the year for steel.

As we commented last month, a better performance of China’s stock market was good news for China’s economy, which translates into stronger demand for metals. The up trend continued in August as Chinese stocks keep reaching new highs.

Another good benchmark for steel prices is the Dow Jones US Steel Index, which tracks major steel producers. We already warned of a potential move for steel producers last month when we pointed out that “the index has been consolidating over the past five months and it might be ready to move up sometime this year.”

Dow Jones US Steel Index since 2012

Dow Jones US Steel Index since 2012

The US Steel Index is in bullish territory, while stocks such as Nucor’s are hitting a 6-year high. Investors are pouring money into steel-related stocks and it wouldn’t surprise us if steel prices followed.

What This Means For Metal Buyers

We have already seen some industrial metals turning upward in 2014. If these developments continue and the metal sector keeps moving up, steel won’t be left behind. Steel stocks have a strong correlation with steel prices. This bullish move in steel-related stocks should warn steel buyers to expect steel prices to at least remain supported throughout the rest of the year.

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The cash price of steel billet rose 7.1 percent over the past month to $450.00 per metric ton, the second straight month of gains. The 3-month price of steel billet closed the month up 7.1 percent on the LME at $455.00 per metric ton. For the second month in a row, the US HRC futures contract spot price increased, rising 1.5 percent over the past month to $675.00 per short ton. At $381.00 per short ton, the price of US shredded scrap finished the month 0.5 percent higher. This was the second straight month of declines.

After rising the previous month, US HRC futures contract 3 month prices dropped 0.2 percent to $645.00 per short ton.

The price of Chinese billet held steady around $506.36 per metric ton last month. Last month was consistent for Korean steel scrap, which did not move from $246.80 per metric ton. Chinese coking coal experienced a flat month, staying around $226.32 per metric ton. Korean pig iron held pat last month at $626.87 per metric ton. Hovering around $566.60 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.

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