The Raw Steels Monthly Metals Index (MMI) rose by 6.6%, as U.S. steel prices continued their rally.
The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.
Production, capability utilization rise
According to the World Steel Association, global crude steel production increased by 14.5% year over year for the first five months of 2021. North American steel production rose by 11.3% during that period, with a sharp 47.7% increase in May alone.
For the week of July 3, the American Iron and Steel Institute reported that domestic raw steel production totaled 1,842,000 net tons. The capability utilization rate reached 83.0%. There has been a slow but continuous increase since the week of Jan. 2, when the institute reported steel production was 1,650,000 net tons at a capability utilization rate of 74.6%.
Despite this increase, all forms of steel prices remain at an all-time high.
U.S. imports increase
The latest data from the Steel Import Monitoring and Analysis (SIMA) showed steel import permit applications for June increased by 12.4% compared to the previous month. Imports totaled 2,965,000 net tons.
Import permit tonnage for finished steel in June increased by 6.8% month over month to 1,982,000 net tons.
Import permit tonnage for black plate rose by 136%. Meanwhile, heavy structural shapes (up 53%), oil country goods (up 38%), cold rolled sheets (up 26%), wire rods (up 18%), reinforcing bars (up 17%), hot rolled sheets (up 16%), cut lengths plates (up 16%), mechanical tubing (up 15%), plates in coils (up 14%), line pipe (up 13%) and standard pipe (up 11%) were the finished steel imports permits that increased the most this month.
Most of the finished steel import permit applications came from South Korea, Japan, Germany, Taiwan and the Netherlands.
Steel Dynamics’ new goals
The company announced on July 7 that it anticipates achieving carbon neutrality by 2050 for all its electric arc furnace (EAF) steel mill operations.
While the timeline is over 30 years, the interim target may have some more near-term effects. By 2025, the company expects to reduce 20% of its greenhouse gas (GHG) emissions. It aims to reduce emissions by 50% by 2030 (compared to a 2018 baseline).
Moreover, the company aims to increase the use of renewable energy at its EAF operations to 10% by 2025 and 30% by 2030.
In general, other metal producers face costly environmental demands in the future, either imposed by the investment community seeking cleaner investments or public protests for awareness of climate change. Achieving sustainability goals will result in increased costs for producers. It remains to be seen whether or not metal producers can achieve efficiency boosts by going green to cut operating costs in the long term.
Actual metals prices and trends
Chinese slab prices declined 8.4% month over month to $801 per metric ton as of July 1. Meanwhile, the Chinese billet price dropped 1.3% to $547 per metric ton.
After a substantial increase last month, Chinese coking coal increased 5.1% to $408 per metric ton.
U.S. three-month HRC jumped 21.3% to $1,825 per short ton. However, the spot price declined slightly by 0.1% to $1,663 per short ton. Meanwhile, U.S. shredded scrap steel picked up by 11.8% to $503 per short ton.
Receive the latest short-term and long-term outlook for the full range of industrial metals (base and ferrous) at the annual MetalMiner Forecasting Workshop on Aug. 25.