As the price picture gets worse for most commodities, prices continue to get better for metals purchasers, particularly those working for and with automakers.
Major drops in steel prices led our Automotive MMI to yet another all-time low this month.
The steel market is plagued by a massive surplus, particularly of imported steel here in the US, that shows no sign of being whittled away. The US imported a total of 2,987,000 net tons (nt) of steel in October 2015, including 2,258,000 nt of finished steel, up 5.4% and 1.4%, respectively, vs. September final data. Estimates say imported steel now makes up more than 30% of the market, a record.
The UK steel industry is facing a crisis that threatens its very existence as regulations, low prices, shutdowns and imports have taken a heavy toll.
One would think that with automobile sales approaching a record in the US and getting a boost in key market China, that prices would eventually be driven higher by new demand, but this market has shown, several times, that even strong demand in the US for end products is not strong enough to put a dent in the oversupply.
We caution purchasers to remain conservative as prices could fall much lower before a bottom is reached, particularly when purchasing steel.
Actual Automotive Metals Prices
Hot-dipped galvanized steel dropped to $530 a short ton from $545 last month, a 2.7% fall. US steel scrap fell from $179 per st to $167 per st this month, a price loss of 6.7%.