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June, 24th 2017

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Weekly Steel

Week 25 20 Jun 2017

Pressures ease on steelmaking raw materials

Last week the steel market saw the pressure on raw material prices easing slightly. Iron ore levels moved up toward the end of the week and scrap prices reached the highest point since March this year.

Iron ore prices closed the week near $55/tonne cfr Qingdao, much lower than the peak reached in the first quarter this year, but higher than at the beginning of the week. The momentum picked up after the market touched its current annual bottom at $53.49/t cfr Qingdao on Tuesday 13 June.

The slight recovery in iron ore prices also lifted the momentum of the coil market in China last week. Traders were looking at a stable market going forward and reversing slightly their negative outlook of the previous week. 

Week 24 13 Jun 2017

Iron ore approaches 11-month low

Iron ore prices continued to slip last week, falling below $55/tonne cfr Qingdao for the first time since October, according to the Kallanish price index. The current value is close to the lowest level since July 2016.

This year’s price graph is a cause for concern, due to the fall in the iron ore price registered since it rose above $90/t cfr Qingdao in February. On an annual comparison however the price remains 8% above the level registered in June last year.

An overall new correction in iron ore prices is therefore suggested. As a consequence of this, there should be room for finished steel prices to fall slightly in the Chinese market, where HRC is currently holding firmer than rebar. 

Week 23 06 Jun 2017

Raw materials look down, but scrap firmer than iron ore

Last week both iron ore and scrap prices decreased indicating that the market globally is weakening slightly as the summer is starting in China and the Ramadan has begun in Turkey and the Middle East.

Iron ore settled last week at levels close to $55/t CFR Qingdao according to Kallanish price index, the lowest level since October last year. Speculators in the futures Chinese steel market are betting for a decline of finished steel prices into June and the first corrections have been seen already in the coils sector.

Meanwhile scrap in Turkey also corrected downward due to lower prices from the US and slower activity during the Ramadan period. The first effects of the lower scrap price in Turkey have been seen already in Europe where June settlements are set to lose some €5-10/t compared with May levels in most countries.

 

Week 22 30 May 2017

Iron ore at seven months low, scrap stable

Last week the Kallanish iron ore index reached a seven-months low at $58.24/tonne CFR Qindgdao; the correction came as Chinese rebar and HRC prices moved up during the week, indicating that mills have manged to increase somewhat their marginality. While the lower iron price is set to force the market to move down somewhat its finished steel levels, the outlook is for a gentle correction as mills in China are enjoying a better than anticipated market.