Author Archives: Irene Martinez Canorea

The Stainless Steel Monthly Metals Index (MMI) fell in November. The index moved back towards September 2017 levels (when it hit 67 points).  The current index stands at 68 points.

The drop came as a result of lower LME nickel prices and lower U.S. stainless steel surcharges.

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LME Nickel

LME nickel prices traded lower in October.

Nickel prices decreased sharply at the end of the month, showing greater volatility than in the past couple of months. However, nickel prices still appear to be strong and trading volumes seem supportive of the uptrend.

Source: MetalMiner analysis of FastMarkets

Nickel Global Tightness

The global nickel deficit continued to widen this year.

During the beginning of the year, the deficit widened to 106,000 tons from 60,800 tons during the same period in 2017.

However, the latest monthly data show a narrower deficit.

The latest data, published in October, signaled a deficit at 7,100 tons in August versus the previous 16,500-ton deficit in July.

Chinese nickel production dropped 8% due to a fire at the Kalgoorlie smelter in Australia. Full production should return later this month.

Japan’s Sumitomo Corp lowered its forecast for nickel output at its Ambatovy project in Madagascar to 40,000 tons. The initial projection called for 48,000 tons.

The decrease in nickel production came as a result of bad weather and a slow ramp-up after maintenance.

Domestic Stainless Steel Market

Domestic stainless steel surcharges fell again. This is the fourth consecutive drop in stainless steel surcharges this year.

The 316/316L-coil NAS surcharge fell to $0.91/pound, while the 304/304L decreased to $0.63/pound.

Source: MetalMiner data from MetalMiner IndX(™)

The stainless steel surcharge has started a short-term downtrend, driven by the general slowdown in the steel and stainless steel markets.

However, stainless steel surcharges still remain well above 2015 lows.

What This Means for Industrial Buyers

Stainless steel price momentum slowed down again this month, similar to carbon steel. However, nickel prices still remain strong.

Buying organizations may want to follow the market closely for opportunities to buy on the dips. To understand how to adapt buying strategies to your specific needs on a monthly basis, request a free trial of our Monthly Outlook now.

For more efficient carbon steel buying strategies, take a free trial of MetalMiner’s Monthly Outlook!

Actual Stainless Steel Prices and Trends

Both Chinese 304 stainless steel coil decreased by 1.78%, while Chinese 316 stainless steel coil prices dropped 1.48% this month.

Meanwhile, Chinese Ferrochrome prices increased this month by 0.85%, up to $1,857/mt. Ferro Molybdenum lump prices jumped 7.5%, reaching $20,505/mt. Nickel prices also fell this month, dropping by 7.34% to $11,675/mt.

The November Aluminum Monthly Metals Index (MMI) fell this month back to June 2017 levels, before MetalMiner called a bull market for aluminum.

The current Aluminum MMI index stands at 88 points, three points lower than last month’s reading.

Buying Aluminum in 2019? Download MetalMiner’s free annual price outlook

LME aluminum prices fell in October. Aluminum prices increased sharply at the beginning of the month, driven by a potential disruption to alumina supply. However, after supply concerns eased, prices fell sharply.

Source: MetalMiner analysis of FastMarkets

LME aluminum prices have traded since last July in the $1,970-$2,170/mt level. With the exception of the October two-day peak, aluminum prices have held above the strong support level of $1,970/mt since August 2017.

However, current prices now appear closer to that support level. Buying organizations may want to pay close attention to how aluminum prices react to that level.

Asian Aluminum Market

Chinese imports of U.S. aluminum scrap have dropped, driven by new environmental protection control standards that took effect in March. U.S. aluminum scrap may be rerouted to Europe.

India’s aluminum makers, such as Hindalco Industries and Vedanta Ltd, have boosted sales to Japan, driven by U.S. sanctions against Russia’s Rusal.

Import tariffs have impacted traditional supply routes.

Japanese rollers have historically preferred top-tier producers such as Rio Tinto, Alcoa or South 32.  However, aluminum ingot imports from January-August 2018 have doubled from last year. Both primary imports from India have increased as well as value-added products.

The bulk of the imports come as refined ingots instead of billets and slabs (i.e., value-added products). Japan seeks substitute materials for Rusal’s higher-quality products, and has begun importing from the Middle East and Malaysia.

According to trade data, Japan imported 59,545 tons of aluminum ingot so far this year, 50% more than last year. Material flow from Russia decreased by 21%, down to 175,694 tons. 

U.S. Domestic Aluminum

The current U.S. Midwest aluminum premium has also traded sideways for the third consecutive month.

The current premium stands at $0.19/pound; despite the sideways trend for the premium, the current premium remains high.

Source: MetalMiner data from MetalMiner IndX(™)

 

The Japanese Q4 premium decreased by 22% from Q3, falling to $103/mt. The decrease follows three quarters of rising premiums, caused by ample supply in the Asian markets.

What This Means for Industrial Buyers

Despite the recent slide in aluminum prices, the LME aluminum price trend suggests a continuation of the bull market that started last year.

Tariffs, sanctions and supply concerns will act as a support to aluminum prices, both for LME aluminum and the U.S. Midwest premium. Adapting the right buying strategy becomes crucial to reducing risks.

Only the MetalMiner monthly outlooks provide a continually updated snapshot of the market from which buying organizations can determine when and how much to buy of the underlying metal.

For more information on how to mitigate price risk year-round, request a free trial to our Monthly Metal Buying Outlook.

Want to see an Aluminum Price forecast? Take a free trial!

Actual Aluminum Prices and Trends

Aluminum prices fell this month, with a closing price in October of $1,966/mt.

Meanwhile, Korean commercial grade 1050 sheet fell by 4.37% to $3.28/kilogram following last month’s downtrend.

Chinese aluminum primary cash prices decreased by 5.78%, while Chinese aluminum bar fell by 3.57%. Chinese aluminum billet prices also decreased 3.67% this month, to $2,079/mt.

The Indian primary cash price fell by 2.48% to $1.96/kilogram.

buhanovskiy/AdobeStock

The Raw Steels Monthly Metals Index (MMI) decreased this month, dropping two points for an MMI reading of 87 points. The Raw Steels MMI had held at 89 points since August.

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Domestic steel prices have showed slowing momentum since June 2018. Domestic steel prices increased sharply at the beginning of the year, driven by a bullish market in commodities and industrial metals and the Section 232 tariffs.

Buying organizations may want to remember that domestic steel prices have remained at more than seven-year highs this year.

Source: MetalMiner data from MetalMiner IndX(™)

Hot-rolled coil, cold-rolled coil and hot-dip galvanized prices decreased in October. Meanwhile, plate prices increased this month, supported by lower metal availability.

Source: MetalMiner data from MetalMiner IndX(™)

With budgeting season in full gear, domestic steel prices may start increasing at some point between November and January, according to historical steel price cyclicality analysis. Therefore, companies will need to know when and how much to buy.

Chinese Steel Prices

So far in November, all forms of Chinese steel prices have decreased. Chinese domestic steel prices started to decrease at the end of October, driven by the start of the winter season.

Source: MetalMiner data from MetalMiner IndX(™)

But the real question to ask around Chinese steel prices appears less apparent. Have prices really declined in RMB and has the currency moved (i.e., has the RMB depreciated) such that the steel price from a U.S. buyer’s perspective appears to be dropping?

When looking at the price of Chinese steel (HRC and CRC) in U.S. dollars, prices have in fact decreased.

We can do a simple calculation, looking at the percentage decrease from September 2018 to November 2018 in Chinese steel prices in RMB and USD. Chinese HRC prices in RMB decreased 6% in that period, while CRC prices dropped by 3% in the same time frame (also in RMB).

The same calculation in USD results in a 7% decrease for HRC prices and a 4% decrease for CRC.

Source: MetalMiner data from MetalMiner IndX(™)

The depreciation of the yuan has moved Chinese steel prices lower from a U.S. buyer’s perspective. A weaker currency makes Chinese goods more appealing, despite the tariffs.

Source: MetalMiner data from MetalMiner IndX(™)

The Spread and Cost Calculation

When looking at the historical spread, readers can see that the spread has been increasing for most 2018.

Source: MetalMiner data from MetalMiner IndX(™)

The spread between U.S. CRC prices and CRC Chinese prices has increased sharply since the beginning of 2018. The slope of the increase is even larger over the March-April period, when domestic steel prices skyrocketed.

The larger spread does not come about only due to higher U.S. domestic steel prices, but also by a weaker yuan. The combination of both factors has resulted in a lower Chinese price (and a larger spread).

To answer the question of importing steel from China or not, let’s look at U.S. versus Chinese prices.

Considering November prices in $/st for HRC and CRC in both countries, the freight at $90/st and the 25% steel tariff, the final price still appears to be appealing for U.S. buyers.

Source: MetalMiner analysis from MetalMiner IndX(™) data

Chinese prices could still increase by 8% or U.S. prices could still decrease by 8% (in the event of the other moving flat) without any change in the final price for both.

What This Means for Industrial Buyers

Buying organizations may want to pay close attention to Chinese and U.S. price dynamics to decide when to commit to mid- and long-term purchases. Adapting the right buying strategy becomes crucial to reducing risks.

Only the MetalMiner monthly outlooks provide a continually updated snapshot of the market from which buying organizations can determine when and how much to buy of the underlying metal.

For more information on how to mitigate price risk year-round, request a free trial to our Monthly Metal Buying Outlook.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

Actual Raw Steel Prices and Trends

The U.S. Midwest HRC 3-month futures price increased this month by 0.37%, moving to $813/st.

Chinese steel billet prices fell this month by 1.71%, while Chinese slab prices fell by 4.66% to $600/mt.

The U.S. shredded scrap price closed the month at $342/st, decreasing from last month.

In November, the Copper Monthly Metals Index (MMI) fell three points. The index fell back to September levels, driven by lower LME copper prices. The current Copper MMI stands at 74 points.

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LME copper prices traded lower in October. LME copper prices held above the $6,000/mt level at the beginning of the month, but then fell at the end of the month. LME copper prices ended up below the $6,000/mt ceiling.

LME copper prices. Source: MetalMiner analysis of Fastmarkets

However, LME copper prices seem to have recovered some momentum and increased sharply at the beginning of November. So far, LME copper prices have increased by 3.2%. LME copper prices breached the $6,000/mt level and buying trading volume remains strong.

Readers may want to remember the $6,000/mt level served as a price ceiling for copper in 2017. Prices climbed toward that ceiling several times during 2017, but failed to breach it.

Copper prices breached the $6,000/mt ceiling back in August 2017; copper has remained in a long-term uptrend since then.

Global Copper Outlook

The copper supply-and-demand balance has run a deficit since the beginning of the year. In fact, the deficit has widened each month.

According to the International Copper Study Group (ICSG), July data showed a 47,000-ton deficit. Global stocks have also dropped, specifically in the Chinese copper market.

Chile currently produces around 25% of annual global copper output, or 23 million tons. Miners in Chile continue to explore new copper markets. Chile’s has set its sights on electric vehicles, where copper consumption is higher than regular vehicles. Electric vehicles contain 50 kilograms of copper versus 23 kilograms in the standard combustion engine equivalent.

Chilean miners have also made an effort to secure long-term copper supply contracts. Codelco, one of the largest copper mines (with around 7% of total global supplies), already locked 60,000 tons of copper per year with China’s Minmetals from 2019-2021.

A deteriorating copper ore grade and a healthy demand seems to drive companies to lock in long-term supplies to avoid shortages.

Codelco will invest in the Chuquicamata mine, converting it into an underground facility. The mine will start operations in July 2019 with around 275,000 tons of copper. The expectations are that the mine will process 350,000 tons of copper by 2025.

Chinese Scrap Copper

LME copper prices and Chinese copper scrap prices tend to follow the same trend. Both decreased this month.

However, the pace of the decrease seems slightly different.

Chinese scrap prices appear to be in a soft short-term downtrend, while LME copper prices showed recovering momentum last month.

Source: MetalMiner data from MetalMiner IndX(™)

The spread has become wider again. The wider the spread, the higher the copper scrap consumption and, therefore, the price.

What This Means for Industrial Buyers

LME copper prices slowed down this month. Buying organizations will want to understand how to react to the latest copper price movements.

Adapting the right buying strategy becomes crucial to reducing risks. Only the MetalMiner monthly outlooks provide a continually updated snapshot of the market from which buying organizations can determine when and how much to buy of the underlying metal.

For more information on how to mitigate price risk year-round, request a free trial to our Monthly Metal Buying Outlook.

MetalMiner’s Annual Outlook provides 2019 buying strategies for carbon steel

Actual Copper Prices and Trends

In October, most of the prices comprising the Copper MMI basket fell.

LME copper decreased by 2.7% this month. Indian copper prices fell by 4.71%, while Chinese primary copper prices decreased 4.8%.

Prices of U.S. copper producer grades 110 and 122 fell by 3.38%. Meanwhile, the price of U.S. copper producer grade 102 decreased by 3.20%, down to $3.62/pound.

The October Aluminum Monthly Metals Index (MMI) fell two points for an October MMI subindex value of 91 (its lowest since August 2017).

Buying Aluminum in 2018? Download MetalMiner’s free annual price outlook

 

LME aluminum prices fell slightly in September. However, the mid-term trend has moved mostly sideways, trading between the $1,970-$2,170/mt level. Movements outside this band could  indicate bullish or bearish signals for aluminum.

Source: MetalMiner analysis of FastMarkets

Buying organizations may want to remember that the $1,970/mt level has served as a strong support level (or floor) since August 2017. Aluminum prices fell toward that support level two times during 2017 and 2018, but then rebounded from it.

Aluminum prices decreased in December and April. Therefore, buying organizations may want to closely follow how aluminum prices react to that level.

Alumina Supply Concerns

LME aluminum prices showed an anomaly with the sideways trend driven by supply concerns.

Last Wednesday, Oct. 3, LME aluminum prices rose sharply to over $2,222/mt, on the back of Norsk Hydro’s announcement saying it would cease alumina production at its Alunorte alumina refinery in Brazil due to an environmental dispute.

Aluminum availability remains particularly tight in North America. Therefore, LME aluminum prices responded swiftly to supply concerns and tight supply.

Source: MetalMiner analysis of FastMarkets

However, LME aluminum prices retraced as Brazil granted Hydro the permits it had wanted for new investments at the Alunorte plant in Brazil. Hydro will use new technology to extend the disposal area necessary to continue and expand alumina operations. The refinery will operate at 50% of capacity to start. The decision came late on Friday following difficult negotiations and after the company said it would halt production. The Alunorte alumina refinery has operated at half capacity since March.

The mere news of the alumina shutdown signifies how tight the aluminum market remains. Any indication of a production slowdown, even for raw materials, could send aluminum prices higher.

SHFE Aluminum

Chinese SHFE aluminum prices fell slightly in September and then increased in October.

SHFE aluminum prices followed a similar trend to LME prices; both have moved in a sideways trend.

Source: MetalMiner analysis of FastMarkets

U.S. Domestic Aluminum

As a result of the ongoing uncertainty in the aluminum market, U.S. aluminum Midwest premiums have skyrocketed this year.

However, the current premium has traded sideways for the third consecutive month. The current premium stands at $0.19/lb.

Source: MetalMiner data from MetalMiner IndX(™)

What This Means for Industrial Buyers

Despite the recent change to a sideways trend, the LME aluminum price trend suggests a continuation of the bull market that started last year. Tariffs, sanctions and supply concerns will act as a support to aluminum prices, both for LME aluminum and the U.S. Midwest Premium.

Adapting the right buying strategy is crucial to reducing risks. Only the MetalMiner monthly outlooks provide a continually updated snapshot of the market from which buying organizations can determine when and how much to buy of the underlying metal.

For more information on how to mitigate price risk year-round, request a free trial to our Monthly Metal Buying Outlook.

Want to see an Aluminum Price forecast? Take a free trial!

Actual Aluminum Prices and Trends

LME aluminum prices fell this month, with a closing price in September of $2,054/mt.

Meanwhile, Korean commercial grade 1050 sheet fell by 0.3%, following last month’s downtrend. Chinese aluminum primary cash prices decreased by 1.41%, while China aluminum bar fell sharply by 6.19%. Chinese aluminum billet prices also decreased 6.68% this month, to $2,158/mt. The Indian primary cash price fell by 2.42% to $2.01/kilogram.

The Stainless Steel Monthly Metals Index (MMI) traded sideways in October. The current index stands at 72 points, back at January 2018 levels.

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The sideways trend was created by a less volatile nickel price and lower domestic stainless steel surcharges, while stainless steel prices overseas inched higher.

As MetalMiner highlighted last month, the drop in the index comes as a result of a MetalMiner adjustment to a couple of metals that make up the Stainless MMI. The adjustment is not due to a dramatic fall in nickel or stainless prices.

LME Nickel

LME nickel prices traded lower in September, but then switched to a sideways trend in October.

Nickel prices were more volatile in September, showing two sharp movements (down and up) at the beginning and the end of the month. Despite the recent downtrend, nickel prices have remained in an uptrend since last summer (June-July), when prices started to increase sharply.

Source: MetalMiner analysis of FastMarkets

Global Nickel Tightness

The Philippines, the world’s top supplier of nickel ore, will start limiting the land mines can develop following new environmental rules.

Under these new rules, mines will have a 20-meter “buffer zone” or ban on metal extraction. Nickel miners will see production limits ranging from 50-100 hectares (123-400 acres).

President Rodrigo Duterte has advised miners to reforest areas where they operate to reduce environmental concerns. In addition, all small-scale activities in mountainous regions stopped after the Mangkhut typhoon.

According to government data, nickel ore output decreased by 10% in the first half of 2018 when compared to last year’s 9.43 million tons during the same time frame. The output drop came as a result of the suspension of 11 mines this year, which had zero output during this period.

Domestic Stainless Steel Market

Domestic stainless steel surcharges fell for the third time since the beginning of the year.

The 316/316L-coil NAS surcharge fell to $0.94/pound, while the 304/304L decreased to $0.65/pound.

Source: MetalMiner data from MetalMiner IndX(™)

The pace of stainless steel surcharge increases seems to have slowed this month, along with steel (and stainless steel) price increases.

However, stainless steel surcharges still remain well above 2015-2017 lows.

What This Means for Industrial Buyers

Stainless steel price momentum slowed down slightly this month. Stainless steel’s slower momentum seems to go together with slower domestic steel price momentum. However, nickel prices still remain strong.

Buying organizations may want to follow the market closely for opportunities to buy on the dips. To understand how to adapt buying strategies to your specific needs on a monthly basis, request a free trial to our Monthly Outlook now.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

Actual Stainless Steel Prices and Trends

Both Chinese 304 stainless steel coil increased by 0.85%, while the Chinese 316 stainless steel coil price increased this month by 0.88%.

Chinese Ferrochrome prices decreased this month by 0.35%, down to $1,841/mt.

Nickel prices also increased slightly this month, rising 0.23% to $12,600/mt.

Charles/Adobe Stock

In October, the Copper Monthly Metals Index (MMI) increased four points, recovering to August 2018 levels.

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The latest Copper MMI latest increase came from stronger LME copper prices in September. The current Copper MMI stands at 77 points.

LME copper prices recovered momentum in September and increased sharply. The LME copper price breached the $6,000/mt level.

Source: MetalMiner analysis of Fastmarkets

Readers may want to remember that the $6,000/mt level served as a price ceiling in 2017. Prices climbed toward that ceiling several times during 2017, but failed to breach it. However, prices skyrocketed in August 2017 when copper prices breached the ceiling. Copper has remained in a long-term uptrend since then.

In June 2018, copper prices started to fall. LME copper prices entered a short-term downtrend, which appears to have switched. LME copper prices increased sharply in September, and have continued to increase in October.

Despite concerns about a Chinese economic slowdown and Chinese manufacturing (with a falling Chinese Caixin Manufacturing PMI), copper looks stronger.

Despite an easing of supply in Chilean mines, copper remains in a 45,000-ton deficit. In fact, miner BHP forecasts an increase in copper demand.

The miner analyzed Chinese overseas construction projects, noting copper demand could grow by 1.6 million tons, or 7% of annual demand. If Chinese demand starts increasing again, the copper supply-and-demand balance may fall into a wider deficit and prices may find some additional support.

Chinese Copper Scrap

LME copper prices and Chinese copper scrap prices tend to follow the same trend. However, prices traded differently this month.

LME copper prices increased sharply, while copper scrap prices fell slightly. However, copper scrap price momentum appears to have recovered. Scrap prices could increase in the short term.

Source: MetalMiner data from MetalMiner IndX(™)

The spread has widened again. The wider the spread, the higher the copper scrap consumption and, therefore, the price.

What This Means for Industrial Buyers

LME copper prices showed strength this month.

Buying organizations will  want to understand how to react to the latest copper price movements. Adapting the right buying strategy is crucial for reducing risks. Only the MetalMiner monthly outlooks provide a continually updated snapshot of the market from which buying organizations can determine when and how much to buy of the underlying metal.

For more information on how to mitigate price risk year-round, request a free trial to our Monthly Metal Buying Outlook.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

Actual Copper Prices and Trends

In September, most of the prices comprising the Copper MMI basket increased.

LME copper rose by 5.30% this month. Indian copper prices increased by 4.99%, while Chinese primary copper prices increased 5.18%.

Prices of U.S. copper producer grades 110 and 122 increased by 5.58%. Meanwhile, the price of U.S. copper producer grade 102 increased by 5.30%, up to $3.74/pound.

The Raw Steels Monthly Metals Index MMI again traded sideways this month.

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This marks the third consecutive month the index has held at 89 points. The current Raw Steels MMI is at May 2018 levels.

Domestic steel prices have decreased sharply and steel price momentum seems to have slowed. Prices traded lower in September and continued the downtrend in October. Buying organizations may want to remember that domestic steel prices have remained at more than seven-year highs this year.

Source: MetalMiner data from MetalMiner IndX(™)

All forms of steel fell in September. HRC, CRC and HDG showed weaker momentum. Meanwhile, plate prices held stronger in September. Plate prices had the support of low metal availability.

However, plate prices started to lose momentum and decrease at the end of the month.

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The Stainless Steel Monthly Metals Index (MMI) fell again this month. The slide of six points moved the index to 72 from the previous 78 reading. Lower nickel prices led the fall, while domestic stainless steel surcharges also fell.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

The drop in the index comes a result of a MetalMiner adjustment to a couple of metals that make up the Stainless MMI. The adjustment is not due to a dramatic fall in nickel or stainless prices.

LME Nickel

LME nickel prices traded lower in August and have continued to drop so far in September.

Nickel prices seemed more volatile in August than for the whole of 2018. Current prices have returned to January 2018 levels. Despite the recent downtrend, nickel prices have remained in an uptrend since last summer (June-July), when prices started to increase sharply.

Source: MetalMiner analysis of FastMarkets

A fundamental tightness in the nickel market could also add more support to nickel prices. Combined nickel stocks have fallen by 45% since the beginning of 2016. LME nickel stocks have fallen for 11 consecutive months, and currently stand at 248,328 tons (back to 2013 levels).

SHFE stocks have fallen by 82% since 2016, when SHFE stocks reached 110,000 tons. Current SHFE stock levels stand at 18,844 tons.

Domestic Stainless Steel Market

Domestic stainless steel surcharges fell for the second time since the beginning of the year. The 316/316L-coil NAS surcharge fell to $0.99/pound, while the 304/304L decreased to $0.70/pound.

Source: MetalMiner data from MetalMiner IndX(™)

The pace of stainless steel surcharge increases seems to have slowed this month, along with steel (and stainless steel) price increases. However, stainless steel surcharges remain in a clear uptrend and appear well above 2015-2017 lows.

What This Means for Industrial Buyers

Stainless steel price momentum slowed down slightly this past month. However, both steel and nickel remain in a bull market.

Therefore, buying organizations may want to follow the market closely for opportunities to buy on the dips. To understand how to adapt buying strategies to your specific needs on a monthly basis, request a free trial of our Monthly Outlook now.

Actual Stainless Steel Prices and Trends

Both Chinese 304 stainless steel coil fell by 1%, while Chinese 316 stainless steel coil prices increased this month by 3.02%.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

Chinese Ferrochrome prices decreased this month by 4.25%, falling to $1,848/mt. Nickel prices also fell 9.56% to $12,570/mt.

The Raw Steels Monthly Metals Index (MMI) traded sideways this month, driven by slower domestic steel price momentum. The current Raw Steels MMI fell to May 2018 levels.

Need buying strategies for steel? Request your two-month free trial of MetalMiner’s Outlook

Domestic steel prices have started to fall slightly. Prices traded lower in August, showing some downward momentum. Buying organizations may want to remember that this year domestic steel prices have remained at more than seven-year highs.

Source: MetalMiner data from MetalMiner IndX(™)

All forms of steel decreased in August. HRC, CRC and HDG showed weaker momentum. Meanwhile, plate prices held stronger in August. Plate prices had the support of low metal availability. However, plate prices lost momentum at the end of August and prices decreased. So far in September, prices for all steel forms declined.

The recent slowdown in steel prices may comes down to historical steel price cyclicality. Domestic steel prices have remained in a sharp uptrend since January 2018. Prices have started to come off slightly but remain higher than last year’s average.

Chinese Steel Prices

So far in September, Chinese steel prices have increased. Chinese steel prices increased in August, recovering price momentum. Chinese steel prices appear to be in a recovery and have started an uptrend, after a slight downtrend since the beginning of the year. Higher Chinese domestic demand has supported prices.

Source: MetalMiner data from MetalMiner IndX(™)

Chinese steel prices tend to drive U.S. domestic steel prices. Therefore, buying organizations may want to keep a close eye on pricing.

The Spread

The hot-rolled coil and cold-rolled coil spread seems to be weaker than historical pricing.

The spread has been historically around the +/- $100/st level. However, the spread started a divergence back in November 2015, reaching around $200/st. 

The current spread now stands at $79/st. This means that CRC and HRC prices have become closer than anticipated. Market anomalies sometimes create divergences in prices. However, this may correct soon.

What This Means for Industrial Buyers

Since steel prices remain high, buying organizations may want to follow price movements closely to decide when to commit to mid- and long-term purchases. Adapting the right buying strategy becomes crucial to reducing risks.

Only the MetalMiner monthly outlooks provide a continually updated snapshot of the market from which buying organizations can determine when and how much to buy of the underlying metal. Click here for more information on how to mitigate price risk year-round and request your two-month free trial.

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

Actual Raw Steel Prices and Trends

The U.S. Midwest HRC 3-month futures price fell this month by 3.68%, falling to $785/st.

Chinese steel billet prices increased sharply this month by 11.56%, while Chinese slab prices increased just by 1.17%, moving to $634/mt.

The U.S. shredded scrap price closed the month at $354/st, decreasing from last month.