MetalMiner‘s monthly Raw Steels MMI® registered a value of 78 in December, a 6% decrease from 83 in November.*
*Note: Effective 12/1/14, MetalMiner updated some of the source data from China used to calculate this index. Therefore the December index reading appears a little more volatile when compared to the November reading. Any movements in the January reading will once again reflect only market price changes as opposed to market and source data prices changes.
As we commented last month, things were pointing to further weakness in steel prices. While prices topped in summer, scrap prices managed to hold well. However, in October, scrap prices finally succumbed, confirming that increases in steel prices were not sustainable.
The future doesn’t look too bright either, as we get into 2015. Steel-Insight Editor James May recently gave some reasons based on fundamentals of why coil prices could fall over 20% by Q2 next year.
We certainly don’t know how much prices will fall. However, based on what we see now, we remain neutral/bearish on steel prices. Fundamentals within the industry don’t look very promising; commodities recently fell to the lowest levels seen in over 4 years; meanwhile, the dollar keeps skyrocketing.
What This Means For Metal Buyers
With a rising dollar pushing commodity prices down, steel prices are exposed to further weakness, which we also see hitting US scrap prices. The upside potential of steel prices seems limited while global commodities stay bearish. Buyers should think twice before committing to large volumes.
This Month’s Exact Steel, Raw Materials Prices
Following a decline in price, Chinese coking coal finished the month at $181.97 per metric ton. The price of Chinese slab fell to $498.80 per metric ton. The price of Korean steel scrap closed the month at $192.86 per metric ton. A decline for Chinese billet left the price at CNY 2,840 ($462.28) per metric ton. US shredded scrap prices dropped by this month to $328.00 per short ton.
Over the last month, the US HRC futures contract 3-month price dropped 2.2% to $628.00 per short ton. The spot price of the US HRC futures contract decreased by 1.9% this month, ending at $635.00 per short ton.
On the LME, the cash price of steel billet rose 7.5% over the past month to $500.00 per metric ton. The 3-month price of steel billet reached $480.00 per metric ton after a 5.5% increase on the LME.
Korean pig iron held pat last month at $572.27 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.