Monthly Raw Steels MMI® Falls as Steel Stocks Sink

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The monthly Raw Steels MMI® registered a value of 74 in January, a decrease of 5.1% from 78 in December.

Steel prices can’t catch a break: commodities keep falling as oil sinks, the dollar keeps rising, foreign markets tumble, and  non-ferrous metals keep getting hit. On top of that, fundamentals within the industry don’t look very promising.

Steel ETF (SLX) since 2012

Steel ETF (SLX) since 2012. Source: MetalMiner

Since steel products are thinly-traded in financial markets it gets tricky to technically study steel prices. However, one of the things we frequently look at are steel stocks, as they are strongly tied to steel prices. In the chart above we see the market vectors steel ETF (an index composed of publicly traded companies predominantly involved in the production of steel products or mining and processing of iron ore).

Raw-Steels_Chart_January-2015_FNL

As you can see, the index rose in 2014 but couldn’t reach higher than previous levels. Since September it fell sharply into record lows. This weakness in steel-related stocks might be pointing to further weakness in steel prices as we have seen happen before.

What This Means For Metal Buyers

Nothing seems to suggest higher steel prices in 2015. Buyers might want to wait before buying.

* Get the complete prices every day on the MetalMiner IndX℠

Korean steel scrap prices dropped by 21.0% this month to $153.00 per metric ton. The price of Chinese billet fell 19.0% to $370.70 per metric ton. A 3.9% drop over the past month left Chinese slab at $475.46 per metric ton. The US HRC futures contract spot price fell 3.8% to $607.00 per short ton. A 3.2% decline for the US HRC futures contract 3-month price left it at $605.00 per short ton.

US shredded scrap gained 1.8% to finish the month at $334.00 per short ton.

On the LME, the 3-month price of steel billet held pat last month at $480.00 per metric ton. Prices for the cash price of steel billet on the LME remained constant this past month, holding at around $500.00 per metric ton. Last month was consistent for Chinese coking coal, which did not move from $174.07 per metric ton. Korean pig iron experienced a flat month, staying around $574.89 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.

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