steel price

The normally pragmatic Netherlands has been strangely agitated recently, as both the construction and agricultural industry have protested on the streets of the capital, the Hague, against the government’s measures for combating nitrogen and PFAS-based pollution.

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In itself this would barely be newsworthy for MetalMiner if it weren’t for the impact it is having on an already subdued metals industry.

Even before the widespread disruption to the Dutch construction industry, demand for steel and aluminum was suffering from depressed German industrial consumption, largely due to a downturn in the automotive market.

But in the Netherlands, the government is struggling to resolve an issue with nitrogen emissions permitting, which Reuters reports are four times the E.U. average per capita in the small and densely populated Netherlands.

Although 61% of emissions are coming from agriculture, a sizable portion also comes from the construction industry – a big consumer of aluminum and steel products.

The impact is particularly damaging, as the country has been enjoying a boom in infrastructure and housing investment of late.

As a result of a fiasco over how permits are assessed, a review is underway and, in the meantime, new permits have been withheld, leading to delays and project uncertainty.

Aluminum extruders estimate the European market is down at least 20% from last year as a result. With steel prices also waning, participants across the supply chain are reducing inventories, adding further to the fall in demand being experienced by producers.

Lead times have come in and order books are weak, as many in the steel and aluminum supply chains find themselves overstocked relative to ongoing demand. The double whammy of weak automotive demand now being exacerbated by a fall in construction activity has caught many by surprise.

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The government in the Netherlands will no doubt resolve its permitting issues. However, a return to last year’s robust level of activity is unlikely to bounce back quickly and producers remain pessimistic about demand next year.

In the meantime, prices are likely to remain under pressure and lead times will remain short into 2020.

gui yong nian/Adobe Stock

The Raw Steels Monthly Metals Index (MMI) showed mixed price movements in October, with declines outweighing increases for a one-point index drop to 66.

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U.S. steel prices continued to weaken during October, possibly reaching a new bottom.

Prices appeared to bottom out back in July (with the exception of plate), especially with price gains seen during August and early September.

Then, weakness set in again throughout September.

Source: MetalMiner data from MetalMiner IndX(™)

Plate prices dropped by another 14% since late August’s high price of $799/st down to $684/st, with prices near those for CRC. While plate prices are closer in line with historical pricing norms, plate prices tend to fall below CRC prices, despite being equal at this time.

HRC prices also looked particularly weak recently, dropping 18% to $483/st from the late August  price of $590/st.

While CRC and HDG also dropped below July values to reach new 2019 lows, recent declines were milder (but still significant). CRC and HDG prices dropped 10% and 11%, respectively, over the past couple of months, since reaching higher prices in early September/late August.

U.S. capacity utilization continues to hold above the critical 80% mark, at 80.3%, based on year-to-date production through Nov. 2. Production of 81.6 million tons during that period is up 2.5% year over year, according to statistics from the American Iron and Steel Institute (AISI).

Chinese Prices Fail to Gain Momentum

Chinese steel prices looked flat overall but were down slightly of late.

Source: MetalMiner data from MetalMiner IndX(™)

While prices failed to gain any upward momentum, price declines during the past month or two were mild.

Comparing average August prices to early November prices, cumulative declines ranged between 3.3%-5.4% over the period, with HDG and HRC dropping most (at 5.4% and 5.3%, respectively). CRC dropped 4.6% and plate by 3.3%.

U.S.-China CRC Spread Narrows Again, Nears Long-Term Low

With U.S. prices dropping more steeply than Chinese prices during the past few months, the spread between prices on key commodity forms narrowed once more.

Source: MetalMiner data from MetalMiner IndX(™)

Looking at the above chart showing the spread, valued in U.S. dollars per standard ton, we can see the spread dropped to an absolute value of $29/st — its lowest since December 2017’s value of $22/st.

The red line represents average costs associated with imports, indicating at this time U.S. prices should discourage imports by virtue of being relatively affordable.

The purple line represents the theoretical impact of tariff costs (to be adjusted based on actual tariff rates), which render an additional price buffer for domestic producers (in terms of increasing the price that can be charged before imports look more attractive).

Source: MetalMiner data from MetalMiner IndX(™)

In contrast to HRC, the CRC spread continues to exceed levels expected to discourage imports (pre-tariffs), with the spread remaining above $90/st — our theoretical average per standard ton cost associated with importing.

However, prices dropped below the purple line, indicating the tariff creates an import buffer for CRC at a tariff rate of 25% (based on current price differentials).

U.S. Commodity Steel Imports Decline

According to U.S. Census Bureau data, imports of hot roll sheets totaled 151,330 metric tons in September, compared to 157,636 tons in August. September imports of HRC decreased by 15.5%, from 179,105 metric tons in September 2018.

Imports of cold roll sheets totaled 124,286 metric tons in September, compared to 126,704 in August. Compared to September 2018, imports of CRC dropped by around 19.2%, down from 153,728 metric tons the year prior.

On a monthly basis, increased imports came primarily from Mexico, Canada and Turkey. Imports from Korea, Japan and Spain decreased last month.

In terms of year-to-date figures through August, steel imports totaled 18.8 million metric tons compared with 21.7 million metric tons during the first eight months of 2018.

HRC imports decreased the most, while black plate, line pipe and tin-free steel imports increased the most.

On a year-to-date basis through August, imports from Canada declined, while increases occurred from Brazil, Spain and Ukraine.

Chinese Steel Production Increases

Based on data from the World Steel Association (WSA), global production increases slowed in September.

Production from January through September of this year reached 1,391.2 million tons, up by 3.9% compared to the same period of last year. However, last month, the year-to-date increase measured 4.6% for the January-August period.

Year-to-date increases in Asia totaled 6.3% over the period, while E.U. production contracted by 2.8%. North American production of 90.6 million tons translated into a small increase of 0.3%.

September crude steel production declined in most major producer countries compared with September 2018, with the exception of China, India and Italy.

Crude production in China decreased to 82.8 million tons in September, compared with August production levels of 87.251 million tons, but increased by 2.2% compared with September 2018. India’s production increased by 1.6% to 9 million tons in September compared with last year, while Italy produced 2.2 million tons, a 1.1% increase compared with September 2018.

Japan’s September production dropped by 4.5% compared with September 2018, falling to 8 million tons. South Korea saw a drop of 2.7% during the same monthly comparison period, to 5.7 million tons. A decline of 4% hit German production, with 3.4 million tons produced, while France’s production dropped by 10.2% to 1.2 million tons.

What This Means for Industrial Buyers

Global production levels remain higher, primarily driven by high Chinese production, while demand still looks weaker.

If manufacturing gains continue in China, we could see some pricing momentum return. Some signs point in that direction; as of yet, demand has not yet pushed prices higher.

Buying organizations interested in tracking industrial metals prices with ease will want to request a demo of the all-new MetalMiner Insights platform.

Buying organizations seeking more insight into longer-term steel price trends may want to read MetalMiner’s Annual Metal Buying Outlook.

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Actual Raw Steel Prices and Trends

Steel prices showed mixed movements in October.

Korean scrap prices registered another large drop this month — following last month’s 16.9% decrease — falling another 30.2% to $81/mt. However, Korean pig iron prices increased by 2.8% to $368/mt.

U.S. shredded scrap prices also decreased again this month, falling 11.4% to $225/st.

The U.S. Midwest HRC futures spot price dropped 5.2% to $495/st, while the Midwest HRC futures three-month price increased by 3.6% to $549/st.

LME billet three-month prices dropped 2.3% to $239/st.

Once again this month, Chinese prices in the index showed mixed, generally mild movements.

China billet prices increased by 1.6%, to $496/mt, while HRC prices decreased by 1.2% to $499/mt. Coking coal prices dropped by 5.4% to $248/mt, the largest Chinese price decline this month, while iron ore prices increased by 1.6% to around $63 per dry metric ton.

buhanovskiy/AdobeStock

Editor’s Note: This article has been corrected to reflect the most recent AISI capacity utilization rates and the price delta between the ROW and the US.

Judging by the plunging share price of steel producers and the collapse in steel prices from $1,006 per ton just over two years ago to $557 now, it would seem that Steelmageddon — the term famously coined by Bank of America Merrill Lynch — is upon us.

Or is it?

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A recent Fortune article puts steel producers at fault for rushing to restart idled capacity and even investing in new facilities following President Donald Trump’s imposition of a 25% import duty in 2018.

The measure did meet its objective of lifting capacity utilization from 73% to 80%, as domestic steel mills became more competitive behind the tariff barrier. Though utilization rates dipped in late August through mid-October, they have since come back above 80%.

If that were the end of the story, it is possible steel producers would still be able to play the market by maximizing sales with their 25% buffer against imported steel.

As exemptions have been granted to major trading partners such as Canada and Mexico, that has minimized the benefits of the tariffs for domestic producers. Initially, U.S. producers were at best only 1-2% below the price of imported steel, taking the majority of the 25% as increased profit.

But today, the price delta between the ROW and the U.S. is virtually nonexistent.

Some would argue a global trade war waged by the president, specifically but not exclusively with China, has also contributed to a slowing of steel demand. The counter-argument suggests that while we have seen a drop from 2018, the reality is that we might be at the end of a long-running expansionary business cycle that would have seen slower demand anyway.

The article argues the rise in domestic steel prices has made some U.S. manufacturers less competitive for both domestic sales and their exports. But our own data suggests that 12 out of 18 manufacturing sectors in 2018 had record profits, despite tariffs.

Now, steel plants are being idled again as oversupply is depressing prices below the level seen even before the imposition of the 25% import tariff.

CNN reported U.S. Steel recently announced it would temporarily shut down a blast furnace at its venerable Gary, Indiana facility, another at a facility near Detroit and idle a third plant in Europe due to weak demand and oversupply.

Steel producers’ earnings have headed south in lockstep with falling demand.

Fortune states the combined earnings of U.S. Steel, AK Steel, Steel Dynamics and Nucor tumbled more than 50% in the first two quarters of this year. Capacity utilization dipped back below the 80% target primarily in September and October but has since recovered to 81.6% according to the latest AISI data for the week ending Nov. 2 and year-to-date capacity utilization reached 80.3% compared with 77.5% from a year ago.

The basis of the Section 232 justification was that the U.S. needed to maintain a level of investment and capability in the steel industry as a matter of national security, that certain steels were critical for military and strategic requirements.

Although the defense secretary at the time, James Mattis, said the military needed just 3% of U.S. production of steel and aluminum and that imports didn’t hinder its ability to protect the nation, there are some countries – the U.K. is an example — where the domestic steel industry has been allowed to wither so significantly that it now relies on imports of critical defense materials, like steel, for the hulls of its nuclear submarines.

A better counter would be to question whether tariffs were and remain the best way to protect investment and capability in those strategic areas of production.

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Either way, a global slowdown, coupled with a rush to return capacity to production, has created an oversupplied market in which steelmakers have suffered.

Nor will demand return anytime soon if the World Steel Association is correct.

The association forecast U.S. steel demand will slow to 1% in 2019 (from 2.1% growth last year). In 2020, growth is expected to crawl to just 0.4%, quite possibly prompting the closure of yet more mills and a return to pre-tariff levels of profitability and capacity utilization.

That’s not what the market or the industry wanted. However, to answer the headline, until we see a crash in the steel capacity utilization rate, it’s hard to argue Steelmageddon has arrived.

The U.S. steel sector notched a capacity utilization rate of 81.6% for the week ending Nov. 2, according to a recent American Iron and Steel Institute (AISI) report, as U.S. steel prices continue to plunge.

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U.S. steel production reached 1.89 million tons for the week ending Nov. 2, marking a 0.1% year-over-year increase over the week ending Nov. 2, 2018 (when production reached 1.88 million tons at a capacity utilization rate of 80.5%).

Meanwhile, production during the week increased 1.2% compared with the previous week ending Oct. 26, 2019, when production totaled 1.87 million tons at a rate of 80.7%.

For the year to date, production reached 81.60 million tons at a capacity utilization rate of 80.3%. Production during the period was up 2.5% compared with the 79.58 million tons produced during the same period in 2018 (when the capacity utilization rate checked in at 77.5%).

By region, production totals checked in at:

  • Northeast: 190,000 tons
  • Great Lakes: 676,000 tons
  • Midwest: 181,000 tons
  • Southern: 767,000 tons
  • Western: 74,000 tons

Steel’s Slide Continues

On the price side, October proved to be another downward month for U.S. steel prices.

U.S. hot-rolled coil was down to $483/st as of the start of the month — nearing MetalMiner’s short-term support level. The price declined 12.97% month over month.

U.S. cold-rolled coil fell to $684/st, down 7.69% month over month. U.S. hot-dip galvanized is down 7.21% month over month, having fallen to $746/st.

The plate price dropped 7.07% to $684/st.

Steelmakers continue to grapple with the reality of falling prices, now with over 18 months gone by since the Trump administration slapped a 25% tariff on imported steel.

U.S. Steel, for example, reported an adjusted net loss of $35 million in its third-quarter earnings announcement. Meanwhile, in 3Q 2018, the steelmaker reported adjusted net earnings of $321 million.

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For the first nine months of the year, U.S. Steel reported adjusted net earnings of $124 million, down 80.6% from the $640 million reported during the first nine months of 2018.

A recent Platts report offers a worrying picture of overcapacity in the Chinese steel market, which could have ramifications for steel prices worldwide.

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When Europe or the U.S. has an overcapacity issue, domestic producers suffer and domestic prices are depressed, but the effects rarely ripple much beyond the region’s borders.

But in part because of China’s dominance in the steel sector — producing over half the world’s steel — and in part because Chinese producers use exports to dump excess production when the country produces more than it consumes, the rest of the world feels the impact through increased exports of low-cost steel products.

China has been engaged in a multiyear program to shutter outdated, more polluting steel capacity. New additions have been authorized only on a replacement basis, but Platts’ analysis suggests plants that have been closed for some years but not pulled down have been allowed to count towards the construction of new, far more efficient steel plants.

Specifically, the report states China’s net crude steel capacity expansion will total 37.65 million mt per year over 2019-23, of which 34.88 million mt per year is due to come online in 2019. This will take China’s total crude steel capacity to around 1.2 billion mt per year by the end of this year.

In the September-October period of this year alone, China approved eight steel capacity replacement projects, Platts reports, which will see 17.18 million mt per year of pig iron and 13.56 million mt per year of crude steel capacity commissioned in the next 3-4 years.

The new projects are predicated on closures of 19.52 million mt per year of pig iron and 15.21 million mt per year of crude steel capacity (5.18 million mt per year of pig iron and 2.16 million mt per year of crude steel capacity were already closed before the end of 2018).

This means there will be just 14.39 million mt per year of pig iron and 13.04 million mt per year of crude steel capacity closed during 2020-23, resulting in a net increase of 2.79 million mt per year of pig iron and 0.51 million mt per year of crude steel capacity over the period.

The problem is further exacerbated by actual output from new facilities being even higher than headline capacity, Platts reports. The new facilities can produce up to 20% more than the stated installed capacity, possible through improved production technologies — by adding more scrap into the iron and steelmaking process — and by using higher-grade iron ore, the article states.

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Steel demand in China, at least from the construction sector, has been robust this year.

But worrying signs are appearing that supply is exceeding demand.

Rebar margins have fallen to just $29/mt during July-September from $159/mt in the same period last year.

Manufacturing is depressed, particularly in the automotive sector. The property sector is expected to weaken next year as new plants come onstream looking to run at 100% capacity to recoup investment; increased exports may be the inevitable result.

gui yong nian/Adobe Stock

U.S. raw steel production for the week ending Oct. 19 slowed, with the sector’s capacity utilization rate checking in just below the important 80% mark, all coming as steel prices continue to fall — in some cases, to late 2016 levels.

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Capacity utilization for the U.S. steel sector during the week ending Oct. 19 checked in at 79.6%, according to the American Iron and Steel Institute (AISI).

Production for the week reached 1.84 million tons, down from the 1.88 million tons produced during the equivalent week in 2018 (at a capacity utilization rate of 80.1%).

Meanwhile, production during the week ending Oct. 19 picked up 1.1% from the previous week, when production reached 1.82 million net tons at a capacity utilization rate of 78.7%.

Production for the year through Oct. 19 checked in at 77.9 million net tons, at a capacity utilization rate of 80.3%. The year-to-date production marks a 2.8% increase compared with the same period in 2018, when the rate was 77.5%.

The steel capacity utilization rate remains above the 80% mark for the year, but it has been sliding in recent weeks.

U.S. steel price have showed no signs their slide is nearing an end.

The U.S. HRC price is down 12.63% over the last month, reaching $498/st — dropping below the $500/st mark for the first time since late 2016.

The U.S. CRC price is down 8.99% over the last month, down to $688/st, also its lowest since late 2016.

U.S. HDG is down 9.26% to $745/st.

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Meanwhile, plate, which recently lagged behind the other forms of steel, has showed a more moderate decline over the past month. The U.S. plate price is down 1.49% to $727/st, bringing it down to January 2018 levels.

The World Steel Association is set to report September steel production figures later this week.

In its recently released October Short Range Outlook, the World Steel Association forecast global steel demand would rise 3.9% this year, but just 1.0% next year amid slowing overall growth, trade uncertainty and weakness in the automotive sector.

The October 2019 Monthly Metals Index (MMI) report is in the books.

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This month, just one of the Monthly Metals Indexes (MMIs) increased, while six declined and three held flat.

Some highlights from this month’s MMIs:

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The Raw Steels Monthly Metals Index (MMI) took another hit this month, dropping three points to 67. The index has now dropped for seven consecutive months — following an early 2019 high of 82 in March — on the back of falling steel prices.

U.S. steel prices dropped in September, with plate prices recording the greatest loss. However, historically, plate prices tend to track lower than CRC.

Based on technical analysis, prices for plate could still demonstrate more downside momentum compared to other forms of steel (HRC, CRC and HDG).

Source: MetalMiner data from MetalMiner IndX(™)

U.S. capacity utilization for the year to date remains above the critical 80% mark at 80.4%. During the period, production totaled 74.3 million tons, a 3% increase compared to the same period last year, according to the American Iron and Steel Institute (AISI).

However, weekly data for the week ending Oct. 5 indicated capacity utilization of 78%, with 1.8 million tons produced, a 3.9% decrease compared to the same period last year.

Chinese Prices Weaken

China CRC and plate prices nudged down recently, while HRC prices dropped to a greater extent.

Meanwhile, HDG prices took a clear downward turn in September.

Source: MetalMiner data from MetalMiner IndX(™)

During the course of 2019, Chinese steel prices looked fairly flat overall, with prices now lower than at the start of the year.

HRC, CRC and plate prices looked just slightly weaker compared to January prices. HDG prices dropped more noticeably, priced at CNY 5,690/mt in early October compared to the January price of around CNY 6,040/mt.

China’s Share of Total Global Production Continues to Increase

Based on data from the World Steel Association (WSA), global production of steel during the first eight months of 2019 totaled 1,239 million tons, up 4.6% percent compared to the first eight months of 2018.

China’s total share of global production totaled 53.6%, based on WSA data through August. Based on an estimated 664.04 million tons through August, production increased by 9.4% compared to the same period of 2018.

Additionally, in terms of monthly data, China’s steel production increased once again. China’s August production reached 87.25 million tons in August after dropping during the two months prior from June’s peak 2019 production of 89.09 million tons.

Meanwhile, production in Japan, the world’s third-largest steel-producing country, fell by 3.7% during the eight-month period, down to 67.589 million tons. The country’s share of global production dropped to 5.5%, compared to 5.9% during the first eight months of 2018.

U.S. production totaled 59.23 million tons through August, an increase of 4% compared to the same period of 2018, according to WSA numbers. Share of global production remained static at 4.8%. Likewise, production in India, the world’s second largest producing country, also remained flat at 6.1%, in terms of total global share of production.

Ongoing GM Strike Continues to Hurt Steel Demand

Given that demand from GM represents around 5-9% of annual steel demand in the U.S. (by various estimates), the ongoing strike continues to place a drag on U.S. steel prices.

As of Oct. 10, the strike had reached its 25th day.

What This Means for Industrial Buyers

Global growth in the production of steel appears to remain in excess of growth in steel demand, exerting downward pressure on prices.

Therefore, industrial buying organizations may benefit from understanding exactly when and how much to buy in this falling market.

Buying organizations interested in tracking industrial metals prices with ease should request a demo of the all new MetalMiner Insights platform.

Buying organizations seeking more insight into longer-term steel price trends may want to read MetalMiner’s Annual Metal Buying Outlook.

Free Partial Sample Report: 2020 MetalMiner Annual Metals Outlook

Actual Raw Steel Prices and Trends

Steel prices weakened further in September.

Korean scrap prices registered a 16.9% decrease, falling to $116/st. Korean pig iron dropped 0.2% to $358/mt.

U.S. shredded scrap prices dropped 13.6% to $254/st. The U.S. Midwest HRC futures spot price dropped 10.9%, while the Midwest HRC futures three-month price fell by 3.6% to $522/st and $530/st, respectively.

LME billet three-month prices dropped 12% to $234/st.

Chinese prices in the index showed mixed, mild movement. Chinese billet prices increased the most, rising 2.1% to $488/mt. HRC prices decreased the most, dropping 1% to $505/mt.

Steven Husk/Adobe Stock

The Automotive Monthly Metals Index (MMI) held flat this month for an MMI reading of 85.

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U.S. Auto Sales

The Big 3, which now all report sales on a quarterly basis, released sales figures for the third quarter.

General Motors reported third-quarter deliveries of 738,638 vehicles, marking a 6.3% year-over-year increase.

Negotiations between GM and the United Automobile Workers (UAW) union entered their third week this week, UAW rejected the latest GM offer on Sept. 30, according to a UAW statement.

“This proposal that the Company provided to us on day 15 of the strike did not satisfy your contract demands or needs,” UAW Vice President Terry Dittes said in a release. “There were many areas that came up short like health care, wages, temporary employees, skilled trades and job security to name a few.  Additionally, concessionary proposals still remain in the company’s proposals as of late last night.”

Earlier this month, MetalMiner Executive Editor Lisa Reisman weighed in on a lingering strike’s potential impact on steel prices.

“Given that the U.S. market consumes about 110 million tons annually, and GM’s share represents about 8% of domestic steel production, it would take a 39-day strike to lower demand by 1 million tons, or 1%,” she wrote.

As of Thursday, Oct. 3, the strike has reached its 18th day.

Ford reported third-quarter vehicle sales of 580,251, down 4.9% on a year-over-year basis. However, Ford truck sales increased 8% year over year.

Fiat Chrysler’s third-quarter sales were flat compared with Q3 2018.

Honda sales were down 14.1% in September compared with September 2018 sales.

Toyota reported sales fell 16.5% in September on a volume basis and by 9.2% on a daily selling rate basis. Nissan’s September sales fell 17.6% on a year over year basis.

According to a jointly released forecast by J.D. Power and LMC Automotive, accounting for fewer selling days, September vehicle sales were down 7.8% compared with September 2018.

Ford, Mahindra Team Up

Ford recently announced a joint venture partnership with India’s Mahindra, which will aim to “develop, market and distribute Ford brand vehicles in India and Ford brand and Mahindra brand vehicles in high-growth emerging markets around the world.”

Ford will own a 49% controlling stake in the joint venture, with Mahindra owning a 51% stake.

“Ford and Mahindra have a long history of working together, and we are proud to partner with them to grow the Ford brand in India,” Ford’s Executive Chairman Bill Ford said in a release. “We remain deeply committed to our employees, dealers and suppliers, and this new era of collaboration will allow us to deliver more vehicles to consumers in this important market.”

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Actual Metal Prices and Trends

The U.S. HDG price fell 3.8% month over month to $804/st as of Oct. 1.

LME three-month copper was essentially flat, moving to $5,640/mt. U.S. shredded scrap steel fell 13.6% to $254/st.

The Korean aluminum 5052 coil premium rose 0.6% to $3.14 per kilogram.

Pavel Ignatov/Adobe Stock

Global crude steel production increased 3.4% in August on a year-over-year basis, the World Steel Association reported.

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Production for the month reached 156 million tons, according to the World Steel Association report, which collects production data from 64 countries.

The 3.4% increase comes after a 1.4% year-over-year increase the previous month.

Broken down by individual countries, top steelmaker China produced an estimated 87.3 million tons, up 9.3% on a year-over-year basis — a sharp jump from last month’s 5% year-over-year increase.

As Stuart Burns explained yesterday, China’s production in recent years has continued to rise despite mandated production closures aimed at mitigating high pollution levels in many parts of the country. Production cuts were at first mandated by Beijing, but last year local authorities were set their own production cut levels.

“Fears are therefore rising that China could be on track to create a glut this winter despite the now normal winter closures,” Burns wrote.

“China’s rivals in southeast Asia are looking on warily concerned that rising exports will further depress regional prices as the domestic market fails to absorb the anticipated record output.

“That’s not good news for the rest of the world.

“Even markets protected by high tariffs like the U.S. will be dragged down by lower global prices and imports undercut domestic U.S. mills.”

As the winter heating season approaches in China, the scope of this year’s production cuts will prove to be a critical factor monitored by steel-producing nations around the world.

Elsewhere, Japan produced 8.1 million tons in August, down 7.8% year over year. South Korea’s crude steel production fell 2.6% to 5.9 million tons in August 2019.

In Europe, German production ticked up 0.8% to 3.3 million tons, while Italy’s production plunged 26.7% to 900,000 tons. France produced 1.1 million tons, up 11.2% year over year, while Spain’s production dropped 4.6% to 1.1 million tons.

U.S. production, meanwhile, hit 7.5 million tons, up 0.3% on a year-over-year basis.

According to the America Iron and Steel Institute (AISI), U.S. steel production for the year through Sept. 28 reached 72.6 million tons, up 3.4% compared with the same period last year.

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The U.S. steel sector’s capacity utilization rate checked in at 80.6% for the year through Sept. 28.

U.S. steel prices have been on the decline of late.

The U.S. HRC price is down 5.13% over the last month, down to $555/st as of Monday. U.S. CRC is down 1.98% to $741/st, while U.S. HDG is down 4.4% to $804/st.

The drop for plate has been even steeper, as U.S. plate is down 7.65% to $736/st.