The monthly Raw Steels MMI® registered a value of 83 in November, a decrease of 1.2% from 84 in October.
In October, steel prices kept falling. However, the most significant drop wasn’t in steel products this month but in US scrap prices. As Steel Insight Editor James May explained recently: “Iron ore and coal have slumped this year, but for an extended period US scrap prices stayed high reflecting strong demand. Yet, the US is not immune from global trends. It is a net exporter of ferrous scrap and as US prices stayed high while international prices fell, US exporters were unable to sell to overseas markets. Moreover, European exporters were able to shift cargo to the US market. The result: scrap oversupply in the US and falling prices.”
It looks like this year international prices were pointing the way for domestic prices and US prices are finally succumbing. The recent fall in US scrap prices might also prove that increases in steel prices were not sustainable.
What This Means For Metal Buyers
With a rising dollar pushing commodity prices down, steel prices are exposed to further weakness, which has finally begun to be reflected in US scrap prices as well. The upside potential of steel seems limited while global commodities stay bearish.
At $350.00 per short ton, US shredded scrap was down 8.1% for the month.
At $465.00, the steel billet cash price finished the month up 3.3% on the LME. After dropping the previous month, the spot price of the US HRC futures contract prices rose 1.3% to $647.00 per short ton. The 3-month price of the US HRC futures contract rose 1.1% to $642.00 per short ton after falling the previous month.
Last month was consistent for the 3-month price of steel billet on the LME, which did not move from $455.00 per metric ton. Chinese billet experienced a flat month, staying around $506.37 per metric ton. Korean steel scrap held pat last month at $224.53 per metric ton. Chinese coking coal traded sideways last month, staying around $226.32 per metric ton. Hovering around $594.07 per metric ton for the month, Korean pig iron remained unchanged. Last month was consistent for Chinese slab, which did not move from $566.61 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.