The Raw Steels Monthly Metals Index (MMI) increased by 4.3% for this month’s value.
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U.S. steel prices start increasing
HRC prices increased by over 5.4% throughout August, closing at $486/st. During the first two weeks of September, the price rallied up to $521/st.
Meanwhile, Chinese HRC prices mostly traded sideways during August and the first two weeks of September.
The recovery of the U.S. auto industry might be driving the steel price increases.
U.S. auto production continued to improve. Producers such as General Motors, Ford and Fiat Chrysler ramped up their assembly plants.
However, supply has not quite caught up with demand. As such, U.S. auto inventory continues to tighten.
By the end of June, vehicle inventory fell to 2.6 million, or 33% fewer units year over year. Pundits suggest U.S. auto sales will reach an annualized 13.5 million unit rate for 2020, with stronger demand coming in 2021.
The aforementioned factors have not only supported the U.S. HRC price; HDG prices also surged.
The U.S. HDG price only increased by 5.6% throughout August, reaching $736/st, but found further support during the first two weeks of September. By the end of the second week of September, HDG broke resistance to $788/st.
Chinese steel market
After record imports in July, China’s iron ore imports in August fell 10.9%.
The General Administration of Customs reported China imported 100.36 million tons of iron ore throughout August, while consumers bought 112.65 million tons in July. However, imports increased 5.8% year over year.
According to Tang Binghua, of Founder CIFCO Futures, imports slowed in August partly due to port congestion from coronavirus-related restrictions. In addition, fewer shipments came from Australia as it closed its financial year.