STEEL WEEK IN BRIEF: Winter cuts hit Asian prices, iron ore rally, Iran slab market, Brazilian royalties...
Metal Bulletin reviews the major stories affecting the steel market over the past week.
Iron ore prices moved closer to $70 per tonne cfr this week, despite mixed futures and steel prices.
On Friday, Metal Bulletin’s 62% Fe Iron Ore Index was $67.94 per tonne cfr on Friday, up from $62.61 per tonne cfr a week earlier.
The use of Metal Bulletin’s iron ore indices to price physical cargoes continues to expand, with a Pilbara Blend Fines cargo traded using the Metal Bulletin 62% Fe iron ore index on an online platform on Thursday.
The seaborne coking coal market calmed down on Friday, but market participants expect further price rises due to persistent supply tightness. Metal Bulletin’s indices were all unchanged, at $198.92 per tonne cfr China and $198.25 per tonne fob Australia for premium hard coking coal.
A window may be opening for China’s coke exports as the domestic market has remained relatively stable while seaborne coking coal prices have soared.
Scrap prices have increased again this week, with Turkish mills pausing their deep-sea scrap purchases on Friday, as most mills have covered their December bookings.
Taiwan’s prices for imported containerized HMS-grade ferrous scrap moved up further this week on sustained demand and limited supplies, while UK light iron scrap prices also climbed, thanks to buoyant demand in export markets that has tightened availability.
India has ambitions to become self-sufficient in scrap, but an expected widening in the gulf between consumption and domestic supplies over the next five years could be a positive development for India’s scrap importers.
China’s winter steel production cuts are expected to provide some much-needed support to Asian steel prices.
East China’s Shagang has raised its long steel prices for late November amid a strengthening spot market.
Metal Bulletin’s fob China hot-rolled coil (HRC) Index was $551.25 per tonne on Friday, up by $0.50 per tonne on a daily basis, with market participants saying that steel mills may raise offers next week given a bullish outlook for domestic prices.
Export prices for Latin America-origin HRC increased, amid renewed trading activity and higher international values.
California Steel Industries (CSI) has opened its flat-rolled order book for the first two weeks of January and raised prices by $30 per ton ($1.50 per hundredweight).
Prices for domestic steel beams in Europe rose this week as larger mills increased their offer prices due to a shortage of availability and logistical problems.
Domestic prices for hot-dipped galvanized (HDG) coil in Europe are expected to increase in the first quarter of next year.
Kardemir, Turkey’s largest integrated long steel producer, increased its domestic long steel and pig iron sales prices.
Turkish domestic rebar and wire rod prices continued to increase in line with rising imported scrap values and the weakening lira.
Import prices for billet in Southeast Asia weakened further over the past week amid sustained bearishness in the downstream long steel markets.
Iranian steel billet has been quietly gaining acceptance in the global market because of its attractive prices compared with material from other suppliers.
Growing export volumes of steel slab from Iran are enhancing the country’s standing in the global market for the semi-finished product and are already having an influence on slab pricing in other markets. Therefore, Metal Bulletin is proposing to launch an assessed price for Iranian export steel slab.
The US Commerce Department confirmed dumping margins on imports of carbon and alloy rod from Russia, Belarus, the United Arab Emirates in the past week.
Ukraine’s largest steelmaker, Metinvest Holding, drafted a suspension agreement against the US related to likely anti-dumping duties on wire rod, but rival steel producer ArcelorMittal Kryvyi Rih failed to back the deal
Around the world
US steelmaker Nucor plans to build a $250-million reinforcing bar micro-mill near Kansas City, Missouri, and is eyeing another in the southeastern United States.
Gerdau will restart its Mogi das Cruzes steelworks, in Brazil’s south-eastern São Paulo state, in March 2018, due to the rebound in local automotive industry.
The Brazilian Congress has approved a bill to raise royalties on iron ore to a fixed 3.50% from a previous maximum of 2%.
But the higher fixed-rate royalty on Brazilian iron ore will affect Vale’s competitiveness - especially at a time of depressed prices - and will compromise the maintenance and operation of high-cost mines, the mining major said.
Novolipetsk Steel (NLMK), Russia’s largest steelmaker, expects the country to shift to becoming an exporter of coated products once new capacity at domestic producers comes on stream.
Russia’s Industrial Metallurgical Holding (IMH) is aiming to increase pig iron shipments to the US, where protectionist trade defense measures have led to an increase in domestic steelmaking.
China’s imports of steelmaking raw materials including iron ore, coking coal and scrap had mixed fortunes in October, with the former falling to a 20-month low, with the latter two growing year on year.
Meanwhile, Chinese crude steel production rose by 6.10% year on year in October, the World Steel Association (Worldsteel) said, maintaining global growth in output.