MetalMiner | Jun 04, 2015 03:33AM ET
The price forecast for US steel markets, much like me after contracting salmonella poisoning last week, has been quite lethargic lately.
An imminent pullout from the doldrums doesn’t look all too likely due to several major factors, which we’ll dive into shortly, and is supported by MetalMiner’s monthly Raw Steels MMI® clocking in with a value of 59 in June, a 1.7% drop from 60 in May.
The monthly Raw Steels MMI® – a price sub-index tracking a basket of finished steel and raw material prices from all corners of the globe – has been unhealthy for quite a while, and (after undergoing a slight recalibration at the end of 2014) has hit a new all-time low this month. Why?
Here are a few elements to take into account:
Carbon flat-rolled inventories. Values in millions of tons (add 000 to the end of each number on the chart). Source: MSCI, Steel-Insight. Chart courtesy of Steel-Insight.
The US price of hot-rolled steel coil (HRC) has recently bumped up near the end of May on our IndX, which indicates more broadly that HRC, as well as CRC and HDG steel, seem to be stabilizing after falling for over a year. However, it seems early to call for a bottom. While commodity markets remain bearish and the dollar holds, we don’t expect HRC, CRC or HDG prices to make significant upside moves.
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