The iron ore and coking coal markets have shed gains made in recent months, with many market participants seeing potential downside for prices in the days to come before they find a floor.
Amid this scenario, Metal Bulletin looked at just how low can steelmaking raw materials prices go.
Seaborne iron ore prices picked up on Friday May 19 amid a surge in China's steel futures, which gave a boost to trading activity. Metal Bulletin’s 62% Fe Iron Ore Index came to $62.69 per tonne cfr Qingdao, up by $1.09 per tonne on a daily basis.
Trading activity finally picked up in the seaborne coking coal spot market as the week drew to an end, albeit not enough to rid it of bearish sentiment.
Metal Bulletin's fob Australia premium hard coking coal index fell $3.96 per tonne to $155.91 per tonne. The fob Australia hard coking coal index was unchanged, at $150.10 per tonne, as were the cfr China indices, at $162.84 per tonne for premium hard coking coal and $155.47 for hard coking coal.
This week’s positive news for the coking coal sector was the reopening of the Goonyella coal rail system in Queensland, Australia, following heavy rainfall in the region.
In terms of scrap, Turkey’s steel mills continued their deep-sea purchases for June this week, with prices showing a slight decrease, while Taiwanese import and US export prices were holding stable.
Meanwhile, Indian import prices went down, from Monday May 15 to Friday May 19, as buyers stayed out of the market over fears that markets could collapse during the slowdown in the Islamic holy month of Ramadan.
The advance of the paper market in China led rebar and hot rolled coil (HRC) spot prices to rise on Friday.
Domestic prices for rebar in Poland have declined further over the past week due to competition from cheap imports.
Import prices for re-rolling-grade HRC in Vietnam dropped over the past week, but then started to move up again on an unexpected turnaround in China’s domestic market.
The flat steel market in the UAE was slow this week as the Islamic holy month of Ramadan will start in about ten days’ time, and the summer holiday season is also close.
Metal Bulletin launched a weekly index for CIS-origin export steel billet on an fob Black Sea basis. The index, which was launched on May 15, has replaced the CIS export billet $ per tonne fob Black Sea ports price assessment.
Turkish billet prices increased in line with rising domestic rebar values over the past week.
Steel billet importers in Southeast Asia stepped up their procurement deals over the past week amid firm offers from China.
The continuing correction in coking coal prices, coupled with a weak iron ore market and pressure from cheap flat steel products from China, was expected to push slab prices down further in May, according to Metal Bulletin’s global slab wrap.
In Latin America, slab export prices dropped this week, as producers reduced offers amid lower raw materials costs and falling international flat steel prices.
The US Commerce Department set final anti-dumping margins on rebar imports from Turkey and Japan, a measure considered “scandalous” by the Turkish Steel Exporters’ Assn (ÇIB).
India set definitive anti-dumping duties on cold rolled and hot rolled flat steel.
Malaysia has initiated an anti-dumping investigation into imports of stainless cold rolled steel from China, South Korea, Taiwan and Thailand.
Australia has initiated a review of anti-dumping duties affecting Chinese exporters of certain galvanized flat steel products, as well as extended a deadline for an anti-dumping probe into galvanized steel from India, Malaysia and Vietnam.
The Eurasian Economic Commission has extended its anti-dumping duties against imports of cold-rolled flat steel products with polymer coating originating from China.
Around the world
Metal Bulletin has reported extensively from the Made in Steel Milan and Eurometal events in Italy during the week.
Italian steelmaker Feralpi, for instance, said it continues export-led growth with its new French mill and that the Algerian rebar export market should remain quiet until 2020.
Also, Michele Tacchini, president of Italian steel trade association Assofermet Ferramenta, said the Italian steel distribution sector could see less competition after the sale of Taranto-based steelmaker Ilva is complete.
And European steel trade federation Eurometal said that trade cases opened by the European Commission (EC) have led to a fall in steel imports from the exporting countries under investigation.
Metal Bulletin’s team also attended the International Stainless Steel Forum’s (ISSF) 21st annual conference in Tokyo, Japan, where the association said that the growth rate of global stainless steel consumption is expected to slow down over the next two years.
Click here to see the six things that Metal Bulletin learned from the event.
Brazil-based steel group Gerdau is advancing talks to divest its assets in Mexico and India, as well as soon sell off its Rancho Cucamonga rebar mill in California, USA, according to sources.
In both cases, Gerdau said it does not comment on market rumours, but emphasised that "it continues with its assets evaluations strategy, aimed at focusing its efforts on the most profitable [operations]".
In China, crude steel output rose to a new high in April, reaching 72.78 million tonnes, according to data released by the country’s National Bureau of Statistics (NBS).
And finally, in South America, the latest political turmoil is bringing uncertainty to Brazil's metals markets.
Metal Bulletin reviews the major stories affecting the steel market over the past week.