steel price

mergers and acquisitions

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This morning in metals news: Nucor Corporation has reached an agreement to acquire the Precoat Metals Corporation’s paint line facility in Armorel, Arkansas; Constellium recently released its Q3 financial results; and the U.S. HRC price continues to rise.

The MetalMiner 2021 Annual Outlook consolidates our 12-month view and provides buying organizations with a complete understanding of the fundamental factors driving prices and a detailed forecast that can be used when sourcing metals for 2021 — including expected average prices, support and resistance levels.

Nucor to buy Arkansas paint line facility

Nucor plans to acquire the Precoat Metals Corporation paint line facility in Armorel, Arkansas, the steelmaker announced recently.

“The paint line facility, located near the Nucor Steel Arkansas sheet mill campus, has a capacity of approximately 250,000 tons per year,” Nucor said in a release. “Nucor considered building a greenfield paint line before deciding to acquire the Precoat Metals facility.”

Constellium reports Q3 financial results

Aluminum product manufacturer Constellium reported Q3 net income of €20 million (U.S. $23.7 million) compared to net income of €1 million ($1.2 million) in Q3 2019.

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Continuing the theme of the last few months, the U.S. steel sector continued to make gains in capacity utilization last week.

We know there are many popular steel contracting indices. But you shouldn’t use them all the time — sometimes they can favor the seller over the buyer. See why! 

Steel capacity utilization rises to 69.7%

Per the American Iron and Steel Institute, U.S. steel mills recorded a capacity utilization rate of 69.7% during the week ending Oct. 24.

Raw steel production during the week totaled 1.54 million net tons. Meanwhile, production during the week ending Oct. 24, 2019, totaled 1.81 million net tons, at a capacity utilization rate of 78.0%.

On a year-over-year basis, last week’s output marked a 14.6% decline.

Meanwhile, production for the week ending Oct. 24, 2020, ticked up 0.5% from the previous week.  Production during the week ending Oct. 17, 2020, totaled 1.54 million net tons at a capacity utilization rate of 69.4%.

YTD output down 19.3%

In the year to date through Oct. 24, U.S. mills produced 64 million net tons of steel, down 19.3% year over year.

Output during the same period in 2019 totaled 79.4 million net tons at a capacity utilization rate of 80.1%.

Regional output

Broken down by region, output during the week ending Oct. 24, 2020, totaled:

  • Northeast: 135,000 net tons
  • Great Lakes: 563,000 net tons
  • Midwest: 171,000 net tons
  • Southern: 600,000 net tons
  • Western: 73,000 net tons

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India

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After a period of negative news following the COVID-19 pandemic, there’s finally some cheer for India’s steel industry, particularly related to Indian domestic steel demand.

Domestic steel demand has bounced back to pre-COVID levels. Automotive and white goods sector demand have driven the steel demand recovery.

Are you on the hook for communicating the company’s steel performance to the executive team? See what should be in that report!

Indian domestic steel demand recovers

As per a report by financial firm Motilal Oswal, higher steel prices and lower coking coal prices ensured Indian primary steel producers’ margins remained strong. In addition, the report noted there were signs of domestic steel demand recovering gradually in the country.

The Motilal Oswal report also pointed out that India’s finished steel consumption, too, is recovering gradually. India’s finished steel consumption registered a drop of as much as 85% year over year in April 2020.

Chinese demand boosts Indian steel

What’s more, a renewed demand in the largest steel consuming market in China also boosted the bullish steel market in India.

Steel trade data by China shows demand remains strong there. China’s net steel exports declined to 10-year lows in September 2020. In addition, China saw a spurt in passenger car sales in September.

Because of these developments in China, its fallout was also seen in the Indian markets. Steel prices have also firmed up and have shown consistent increases over the last four months since July.

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The U.S. steel sector continued to show incremental gains in capacity utilization last week.

Capacity utilization by U.S. mills rose to 69.4% for the week ending Oct. 17, 2020, according to the American Iron and Steel Institute (AISI).

See why technical analysis is a superior forecasting methodology over fundamental analysis and why it matters for your steel buy.

U.S. steel sector continues capacity gains

For the week ending Oct. 17, the U.S. steel sector’s capacity utilization rate rose to 69.4%, producing 1.54 million tons in the process.

The weekly output marked a 15.0% year-over-year decline. Output during the week ending Oct. 17, 2019, totaled 1.81 million tons at a capacity utilization rate of 78.0%.

Meanwhile, production for the week ending Oct. 17, 2020, rose 2.2% from the previous week. For the week ending Oct. 10, 2020, production reached 1.50 million net tons at a capacity utilization rate of 67.9%.

YTD output down 19.4%

Adjusted year-to-date production through Oct. 17 reached 62.48 million net tons. Capacity utilization rate during the period reached 66.3%.

The year-to-date output is down 19.4% from the 77.55 million net tons during the same period last year. The capacity utilization rate during that period reached 80.1%.

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The Raw Steels Monthly Metals Index (MMI) increased 2.8% for this month’s index value amid a steel market recovery.

October 2020 Raw Steels MMI chart

Stop obsessing about the actual forecasted steel price. It’s more important to spot the trend. See why.

Steel market recovery

All U.S. forms of steel prices increased throughout September.

HRC, CRC and HDG prices increased rapidly by 20.4%, 16.4% and 15.4%, respectively. Meanwhile, the plate price increased 4.3%. The wire rod price increased by 1.5%.

However, the Chinese steel market showed the opposite trend or traded sideways.

The Chinese HRC price dropped by 4.4%. CRC increased by 0.22% and HDG had a 6.4% jump the first day of September but remained flat for the rest of the months and through the first two weeks of October.

The prices’ increase in the U.S. market were followed by an increase in capability utilization rate. By the week ending Oct. 3, raw steel production increased to 66.1%. As such, the year-to-date capability utilization rate rose to 66.2% according to the American Iron and Steel Institute.

Over in the Asian market, there are overcapacity concerns.

The South East Asia Iron and Steel Institute (SEAISI) reported that the region, particularly Chinese steelmakers and banks, might have overinvested in new basic oxygen furnace (BOF) integrated mills.

The region’s current capacity is approximately 151 million metric tons. The proposed investment could bring it up to 50 million metric tons, creating 60 million metric tons of overcapacity from BOF alone. It is important to note that BOF mills cannot operate at low capacity.

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steel shipment

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This morning in metals news: U.S. steel prices have made significant gains in recent weeks; exports of liquefied natural gas (LNG) from two key Louisiana export terminals have resumed after Hurricane Laura; the coronavirus pandemic has impacted tin production in Bolivia.

Do you use cost breakdowns in your steel negotiations? See other tips in negotiating with mills and service centers

U.S. steel prices rise

U.S. steel prices have posted significant gains of late. HRC, for example, closed Wednesday at $589 per short ton, up 17.33% month over month.

Meanwhile, the CRC price closed Wednesday at $775 per short ton, up 15.5% month over month.

Finally, U.S. HDG closed Wednesday at $850 per short ton, up 12.73% month over month.

LNG exports resume from terminals hit by Hurricane Laura

Among other impacts, Hurricane Laura disrupted activities at two LNG export terminals in Louisiana.

However, on the heels of the hurricane, the Sabine Pass terminal resumed exports Sept. 11, per the Energy Information Administration. Sabine Pass is the largest LNG export facility in the U.S.

However, the resumption of activity at Cameron terminal did not occur until Oct. 5 due to persisting infrastructural damage at the facility.

Furthermore, the next hurricane on the way could lead to further damage.

“Currently, Hurricane Delta, a Category 4 storm in the Gulf of Mexico, is expected to make landfall in Louisiana on Friday, October 9,” the EIA reported. “Depending on the path of Hurricane Delta, Cameron and Sabine Pass may take precautionary measures and temporarily suspend operations as they did before Hurricane Laura.”

Tin output in Bolivia

The coronavirus pandemic has impacted tin production in Bolivia, the International Tin Association (ITA) reported this week.

Tin concentrate production in the first quarter of the year fell 30% year over year.

In addition, coronavirus-related closures prevented production 2,600 tonnes of refined ton in Q2, the ITA estimated.

Are you on the hook for communicating the company’s steel performance to the executive team? See what should be in that report!

aluminum price landing page with should-cost price

MetalMiner’s metals price landing pages (aluminum, steel and stainless steel) now feature the LME three-month prices set against MetalMiner’s track record, in addition to “should-cost” prices.

How much should your metals buy cost?

It’s a simple question that doesn’t always have a simple answer — or, at the very least, an answer that’s easy to get.

MetalMiner’s “should-cost” models aim to cut through the confusion and give buyers concrete ideas of what the products they’re buying should be costing them.

The MetalMiner should-cost models cover aluminum, steel and stainless steel.

So, what exactly do the models offer?

Aluminum should-cost model

With respect to aluminum:

  • Comprehensive price breakdowns, including conversion cost for specific grade, thickness and width.
  • In addition, the model is global; buyers can use from multiple regions.
  • Lastly, buying organizations can more effectively “lock” conversion costs.

“Many competitors publish the LME three-month price along with the MW premium,” MetalMiner CEO and Executive Editor Lisa Reisman recently noted. “Few, if any, publish the conversion adder based upon grade, gauge, width etc. The MetalMiner aluminum should-cost model provides a level of granularity not previously available in the marketplace.”

Carbon steel

As for carbon steel, there is currently no North American price index for finished steel inclusive of adders and extras.

In addition, the carbon steel should-cost model includes:

  • Most steel contracts are agreed on the basis of base price, which provides little to no flexibility to negotiate on total price. The steel should-cost model provides a price breakdown for adders/extras, which can generate additional cost savings for steel buyers.
  • The model includes a price breakdown comparison of major U.S. steel mills. Buyers can use the information to negotiate annual sourcing contracts.
  • Furthermore, the model contains a high level of granularity for specific types of steel (examples of specificity can be found on our carbon steel price landing page).

Stainless steel

What about stainless?

Similarly, there is currently no North American price index for stainless. In addition, the MetalMiner stainless should-cost model:

  • Contains a high level of granularity for specific types of stainless. Examples of specificity can be found on our stainless price landing page.
  • Second, the model features comprehensive price breakdowns (base price + gauge/width + finish + surcharge + vinyl + CTL).
  • Lastly, it provides better means of negotiating effectively with suppliers.

For more information about the MetalMiner Insights platform and should-cost models, visit the MetalMiner Insights landing page

hot rolled steel

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The steel capacity utilization rate in the U.S. for the week ending Sept. 19 fell to 64.5%.

See why technical analysis is a superior forecasting methodology over fundamental analysis and why it matters for your steel buy.

Steel capacity utilization rate for week ending Sept. 19 drops

The steel capacity utilization rate for the week ending Sept. 19 marked a slight decline from the previous week, when it reached 65.1%, according to the American Iron and Steel Institute (AISI).

U.S. mills churned out 1.45 million net tons of steel during the week, down 19.7% on a year-over-year basis. The capacity utilization rate during the same week in 2019 stood at 77.4%.

Furthermore, production during the week marked a slight decline from the previous week, when production totaled 1.46 million net tons.

YTD output down 20.1%

In addition to the capacity utilization rate, adjusted year-to-date production reached 56.2 million net tons.

Steel mills’ capacity utilization rate reached 65.8% during the aforementioned period.

Meanwhile, for the same time frame in 2019, production totaled 70.3 million net tons at a capacity utilization rate of 80.3%.

Regional output

By region, production for the week ending Sept. 19, 2020, totaled:

  • Northeast: 135,000 net tons
  • Great Lakes: 527,000 net tons
  • Midwest: 169,000 net tons
  • Southern: 553,000 net tons
  • Western: 62,000 net tons

Capacity utilization down, but steel prices make gains

On the price front, U.S. steel prices have showed significant upward momentum in recent weeks.

The U.S. HDG price closed Monday at $804 per short ton, up 11.98% month over month.

Meanwhile, U.S. CRC closed Monday at $729 per short ton, up 11.47% month over month.

U.S. HRC also made significant gains. The HRC price closed Monday at $560 per short ton, or up 19.4%.

Although capacity utilization has been rising on the whole in recent months, the automotive sector’s recovery has, in part, supported steel prices.

“The recovery of the U.S. auto industry might be driving the steel price increases,” Maria Rosa Gobitz wrote in last week Raw Steels MMI report.

“U.S. auto production continued to improve. Producers such as General MotorsFord 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.”

Are you prepared for your annual steel contract negotiations? Be sure to check out our five best practices. 

steel mill production line

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The Raw Steels Monthly Metals Index (MMI) increased by 4.3% for this month’s value. 

September 2020 Raw Steels MMI chart

Does your company have a steel buying strategy based on current steel price trends?

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.

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steel

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This morning in metals news: U.S. steel capacity utilization reached 65.1% for the week ending Sept. 12, the World Trade Organization released a report covering the U.S.’s Section 301 tariffs on Chinese goods; and the copper price approached a two-year high.

Does your company have an aluminum buying strategy based on current steel price trends?

U.S. steel capacity utilization rises to 65.1%

The U.S. steel sector’s capacity utilization rate reached 65.1% for the week ending Sept. 12, the American Iron and Steel Institute (AISI) reported.

Production during the week totaled 1.46 million net tons, down 19% year over year but up 2.2% from the previous week. Capacity utilization for the week ending Sept. 5 reached 63.7%.

However, production for the same week in 2019 reached 1.80 million net tons.

WTO releases report on U.S.’s China tariffs

The WTO this week released a report of its findings related to the U.S.’s Section 301 tariffs on Chinese goods, which amounted to hundreds of billions of dollars.

The report comes more than two years after China requested consultations — in April 2018 — related to the U.S. tariffs.

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