What a dynamic period for the steel and raw materials markets this fall is shaping up to be – especially strange, since prices have not really budged (some even dropped) all summer. But that’s exactly the reason for a flurry of activity behind the scenes.
3 Reasons Steel Prices are Suffering
1. The US Commerce Department basically ruled in favor of Turkish steel rebar producers by failing to impose anti-dumping duties on their imports to the US. According to Reuters, the Rebar Trade Action Coalition, comprised of several domestic producers, was reported to be “shocked” by the decision (that makes two shocking trade decisions in the past few weeks!), because they thought they had a strong case; however, Commerce did place a 1.25% anti-subsidy duty on Turkish rebar importers, mitigating their victory.
At the same time, on this side of the pond, Commerce slapped significant duties on Grupo Acerero SA de CV, Grupo Simec and Deacero (read our previous analysis on Deacero here).
2. Rio Tinto plc is anticipating other global miners will cut 125 million metric tons of iron ore capacity in 2014, roughly equal to the amount of new supply expected to come on stream from Australia and Brazil, according to Reuters reports. “Iron ore prices have plunged 38 percent to five-year lows this year, largely due to a glut of low-cost ore from top producers, Brazil’s Vale, Rio Tinto, BHP Billiton and Fortescue Metals Group.” China’s slowdown is in no small part responsible, and this directly relates to finished global steel prices.
Read on for Reason #3 and today’s full steel, iron ore, coking coal prices…
3. A significant indicator of the China cool-down is news that Baoshan Iron and Steel (Baosteel), China’s No. 2 steel producer, will cut prices for October delivery by 100 yuan ($16.3) per ton, the company said on Wednesday. “October is normally a peak steel consumption period, but Baosteel said it would cut the prices of both hot- and cold-rolled steel for the month,” according to Reuters.
Today’s Steel Prices
Chinese steel prices were flat for the day. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($136.78) and a low price of CNY 830.00 ($135.15) per dry metric ton. The price of Chinese HRC saw essentially no change for the fifth day in a row, remaining around CNY 3,380 ($550.37) per metric ton. The price of Chinese coking coal continues hovering around CNY 1,390 ($226.33) per metric ton for the fifth day in a row.
The cash price of steel billet held steady on the LME at $450.00 per metric ton. For the fifth consecutive day, the steel billet 3-month price held flat on the LME at $455.00 per metric ton.
The US HRC futures contract 3-month price saw little price change yesterday at $643.00 per short ton. The US HRC futures contract spot price held steady yesterday, remaining around $657.00 per short ton.