Our Raw Steels sub-index score dropped by 10% from March to April, partially a result of slumping prices in China.
That score experienced a bit of a comeback for our June reading, rising to 68 from the May reading of 66.
This time around, Chinese steels posted price increases, providing a boost after a tepid April. Chinese slab steel prices rose by 20.1% and billet steel also experienced a major bump, rising by 15.2%.
In the U.S., shredded scrap steel prices stabilized after a 7.1% drop the previous month. Shredded scrap’s June price point is the metal’s second-highest of 2017.
U.S. Steel Prices: Going Up or Down?
As we’ve previously reported, Chinese and U.S. steel price divergences usually mean one will have to move to close the gap.
So, what does that mean for U.S. steel prices?
As we noted previously, U.S. steel prices rose as Chinese prices dropped by 20%, leaving a widening price spread. Ultimately, the former may have to pull back price momentum.
And, given data in 2017 to date, a price drop for U.S. hot-rolled coil (HRC) and shredded scrap would not be surprising. The former has posted price drops every month this year, while the latter has shifted back and forth on either side of a $300/short ton baseline.
President Donald Trump and his administration’s ongoing national security probe into U.S. steel imports will continue to be something to monitor. The administration’s actions with respect to the investigation, if any, would have effects on steel prices and the interplay between U.S. and Chinese prices, in particular.