U.S. Steel Shelves Expansion Plans, Chinese HRC Down 10% For the Week

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U.S. Steel has dropped its plans to expand two of its facilities. The company announced that it will not proceed with the planned expansion to its Minnesota iron ore pellet operations and will not make additional investments at its carbon alloy facilities in Gary, Ind., Forbes reported.

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In addition, the company announced that its Canadian unit, U.S. Steel Canada, will apply for bankruptcy protection after posting operating losses for five consecutive years, aggregating $2.4 billion. U.S. Steel Canada is seeking a court order that would allow it to operate while exploring restructuring alternatives. U.S. Steel has announced that it would provide its Canadian unit with $168.6 million of secured debtor-in-possession financing (DIP Financing) to support operations through the end of 2015.

These measures are a continuation of U.S. Steel’s ongoing initiative to operate competitively in a recovering steel demand environment by focusing on cost reduction and enhancing efficiency.

A 10.1 percent decline in Chinese HRC made it the biggest mover of the week, closing at CNY 3,040 ($495.03) per metric ton on the weekly Raw Steels MMI®. At CNY 3,110 ($506.43) per metric ton, the week finished with no movement for Chinese billet. Prices for Chinese coking coal remained constant, closing the week at CNY 1,390 ($226.35) per metric ton. At CNY 840.00 ($136.79) per dry metric ton, the price of 58% Indian iron ore fines low did not change since the previous week. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($136.79) and a low price of CNY 830.00 ($135.16) per dry metric ton.

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The steel billet 3-month price stayed essentially flat on the LME at $455.00 per metric ton. Following a steady week, prices for on the LME the cash price of steel billet closed flat at $450.00 per metric ton.

Following a 0.3 percent drop, the 3-month price of the US HRC futures contract finished the week at $643.00 per short ton. The spot price of the US HRC futures contract closed last week at $655.00 per short ton, after a 0.3 percent drop. The price of US shredded scrap fell 0.3 percent to $381.00 per short ton after rising 0.3 percent the week before.

Korean steel prices were flat for the week. Korean steel scrap traded sideways last week, hovering around KRW 240,000 ($232.01) per metric ton. Closing at KRW 635,000 ($619.69) per metric ton, Korean pig iron remained unchanged for the week.

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