Our Raw Steels MMI fell seven points* due to the slump in China’s steel prices in April.
(*Note: We changed one of the data elements of our index to map the underlying market more effectively. That change contributed to a lower number this month.)
Since their peak in February, China’s steel prices have fallen by more than 20%, while U.S. prices have continued to climb. But guess what, things changed towards the end of April. Prices in China started to recover (see how we predicted that) while U.S. prices fell (yes, we predicted that too). In this post, I’ll analyze what this price divergence means and how you — assuming you buy or invest in steel — can take advantage of it.