International Steel Prices

CRU: Sheet Prices Increase in All Regions for a Third Week

December 5, 2019

By CRU Prices Analyst George Pearson, from CRU’s Steel Sheet Products Monitor

Sheet prices in the U.S. have risen at a strong rate, yet the underlying volume behind the prices is near the lowest level for the year. This low volume may be attributed to the holiday-shortened week, but more likely it reflects the fact that buyers loaded up on orders when sheet prices were significantly lower than today. For HR coil, the majority of data points were $540-$550 /s.ton, yet the highs and lows were widespread at around +/- $50 /s.ton.

U.S. West Coast prices remained unchanged this week, as mills have been slow to sell for February rolling and buyers remain on the sidelines. Prices need to increase in the Midwest before West Coast mills can capture their own price increases.

Europe

European sheet prices increased for a third week but at a slower rate than the previous two. German HR coil was up by €1 /t, while Italian was €3 /t higher. Each one had increased by €7 /t and €18 /t, respectively, across the two previous weeks.

ArcelorMittal announced an increase in coil offer prices to buyers in Northern Europe this week and other mills throughout Europe were also heard to have increased offers. Mill sales activity has reduced after restocking, and low-priced material now appears to be out of the market. Firmer import offers are also lending support; current offers from India and Turkey are higher than those from domestic European mills. This is creating a stronger price environment.

That said, there are still question marks over real demand, and buying over the next month will determine if higher mill offers send prices higher. Previous attempts to increase prices this year have resulted in stabilization or marginal increases. The Ilva dispute between ArcelorMittal and the Italian government remains uncertain but has deescalated, with a court hearing on Dec. 20 and news reports of a development plan for the facility.

China

Chinese domestic steel sheet prices increased by RMB20-50 /t w/w as the market stabilized. Sheet inventories fell by 2 percent w/w, and are now 14 percent lower than the corresponding period a year earlier, indicating better underlying demand. Demand improved this week as end-users resumed purchases, but uncertainty remains over the sustainability of these prices amid a volatile futures market. Many steel mills expect demand to slow down moving into the second half of December and are keeping prices stable to maintain sales. Meanwhile, ad-hoc production restrictions at Hebei and Shanxi provinces will reduce supply to some extent. Due to these factors, we expect sheet prices to remain on a higher level in early December before falling back in the middle of the month.

Asia

Prices for imported sheet products in the Asia market continued to increase despite lower trading activity as buyers showed hesitance.

For HR coil SAE1006 grade, Indian offers were heard at $465/t CFR Vietnam and Japanese at $480-490/t CFR Vietnam. No official offer was heard for Chinese material. Tradeable levels for Indian and Chinese material were heard at $460/t CFR Vietnam and Japanese material at $470/t CFR Vietnam.

Traders were offering Chinese HR coil SS400 at $470-475/t CFR Vietnam, with the highest bid at $460/t CFR Vietnam.

CRU assessed HR coil prices at $462/t, CFR Far East Asia, a $7/t increase w/w. CR coil prices were assessed at $540/t CFR Far East Asia, up $20/t w/w, while HDG prices were assessed at $570/t CFR Far East Asia, up $10/t w/w.