As May begins, Kallanish has decided to compare the current most important price indicators against prices registered in 2018. This is to understand how the market is developing in what is usually considered one of the strongest period for demand before the summer kicks in.

As expected, semis and finished steel prices are suffering compared with the record levels registered during the first half of 2018. The recovering cycle initiated in mid-2016 reached its peak between the end of the first quarter 2018 and the beginning of Q2. Since then, prices have lost ground almost continuously.

The sole exception to the general trend in ferrous prices has been iron ore, which has seen a new spike since January this year. This is supported by concerns linked with the reduction in output following the dam accident at Vale’s operations in Brazil. This surge in iron ore costs has nevertheless supported global steel prices only marginally, and has brought the issue of steel suppliers’ profitability back into focus.

According to Kallanish price indexes iron ore is currently remaining well above $90/t cfr Qingdao, over 40% higher that the level of some $65/t cfr Qingdao registered at the end of April 2018. Earlier in April the level climbed above $95/t cfr Qingdao for a short period, registering a new recent high for iron ore.

The strength of iron ore prices has nevertheless only mildly affected the rest of the industry. In particular those most directly affected by scrap in Turkey have suffered the most, as Turkish scrap values have continued to be under pressure.