Low Steel Prices, Imports are Leading to Domestic Producer Cutbacks

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Large volumes of steel imports, together with collapsing oil prices, led to cuts in US domestic steel production this week.

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Steel scrap was flat for the week although there’s little optimism that its big fall will be reversed soon. Morningstar also joined other analysts in predicting another difficult year for steel prices.

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Chinese steel prices were flat for the week. The price of iron ore 58% fines from India hit a high price of CNY 450.00 ($72.02) and a low price of CNY 445.00 ($71.22) per dry metric ton. Chinese HRC traded sideways last week, hovering around CNY 2,490 ($398.51) per metric ton. Following a steady week, prices for Chinese coking coal closed flat at CNY 1,080 ($172.85) per metric ton. Closing at CNY 2,460 ($393.71) per metric ton, Chinese slab remained unchanged for the week.

At $519.00 per short ton, the US HRC futures contract 3-month price finished the week down 3.0%. Closing out the third week of declining prices, the spot price of the US HRC futures contract dropped by 0.4%, finishing at $528.00 per short ton. At $247.00 per short ton, the price of US shredded scrap did not change since the previous week.

Korean steel prices were mixed for the week. Korean steel scrap finished the week at KRW 144,000 ($129.51) per metric ton after falling 3.4%. At KRW 530,000 ($476.67) per metric ton, the week finished with no movement for Korean pig iron.

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