Steel Outlook 2014: US Steel Corp Hit Current Market, Not Demand
MetalMiner | Oct 08, 2013 03:35AM ET
The monthly Raw Steels MMI® held steady at 82, fully 18 points below the January 2012 reading of 100. Although the LME steel billet price rose slightly, the underlying dynamics of the steel market suggest current price rises for flat rolled products have more to do with domestic supply disruptions from AK Steel and US Steel Corp., as well as fourth quarter automotive demand, than any structural or systemic improvement in steel demand.
Steel Price Forecast 2014
“It remains unclear as to whether Q4 2014 will follow previous years’ trends of rising prices into Q1,” said Lisa Reisman, managing editor of MetalMiner. “The global dynamics suggest otherwise.” Nonetheless, manufacturers have reported rising steel price quotes. Whether the price rises will stick remains unclear.
The steel longs market, meanwhile, has faced some price pressure as construction numbers have led to a mixed bag – in particular the rate of growth for non-residential construction starts has begun to decline. More analysis on the construction sector and related metals markets here.
Meanwhile, China continues to produce massive volumes of steel and substantially more tonnage than the Chinese market requires, leading to global oversupply.
Key Drivers of the Steel Price Index
The price of Chinese slab closed the month after dropping 4.3 percent. Korean steel scrap prices dropped by 2.2 percent this month.
US shredded scrap closed the month after dropping 1.9 percent. The price of Korean pig iron held jumped 3.5 percent last month.
The 3-month price of the US HRC futures contract closed the month up 0.3 percent at $630.00 per short ton.
Chinese billet traded slightly higher last month. Prices for Chinese coking coal bumped up only a tiny bit this past month. The China price of 58% iron ore fines from India budged upward only marginally.
by Taras Berezowsky
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