Raw Steels Prices on Index Continue Dropping Amid Global Economy Slowdown

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The price drops seen across the raw steels sector tracked by MetalMiner’s weekly steel price index can be attributed to a number of factors, but a few key indicators point to the “why”s:

  • Every single Leading Economic Indicator (LEI) released by the Conference Board (a total of 11 entities, comprising countries and regions), is in the red — save for China. The US and Australia, reported today, are down 0.3 percent and 1.4 percent, respectively. Even China, however, is up only 1.1 percent — and we know what the China slowdown could mean.
  • Also, BHP Billiton reported increased iron ore production recently, a total of 176 million tons up to June this year, exceeding the previously expected figure of 167 million tons. But this increased iron ore output seems to clash with the company’s own view (held by Rio Tinto as well) that both the global economy and China demand are not robust enough in the medium term to merit the increase — this could have an adverse effect on iron ore price. According to the FT, BHP has said back in March that it’s worried about “flattening iron ore demand from China.”

So which prices gained and which lost in the steel complex?

Weekly Steel Price Index Shows Many Drops

The week’s biggest mover on the weekly Raw Steels MMI® was the price of US shredded scrap, which saw a 8.3 percent decline. This week marked the third in a row of declining prices for the metal. The US HRC futures 3-month price rose 0.5 percent over the past week to $638 per short ton. This past week, the spot price of US HRC futures kept quiet, holding at at $605 per short ton.

Chinese steel prices were mixed for the week. The high and low prices of iron ore 58% fines from India ranged in the $130s per dry metric ton. For the third week in a row, the price of Chinese HRC dropped, falling 0.7 percent. Chinese coking coal remained essentially flat from the previous week, and Chinese slab prices were off slightly, down about $13 per metric ton.

Closing out the third week of rising prices, the 3-month price of steel billet increased by 1.3 percent on the LME, landing at $400 per metric ton. Closing at $375 per metric ton, the cash price of steel billet remained unchanged on the LME for the week.

Korean steel prices were flat for the week. Korean steel scrap prices held steady from the previous week under $350 per metric ton. Korean pig iron prices, meanwhile, did not move for the week.

The Raw Steels MMI® collects and weights 13 global steel and raw material price points to provide a unique view into global steel price trends. For more information on the Raw Steels MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

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