Steel Products Prices North America
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/media/k2/items/src/6fe673abb49440a3f7bfbf264fb4cc98.jpg)
Raw Materials Prices: Iron Ore, Coking Coal, Pig Iron, Scrap, Zinc
Written by Peter Wright
December 20, 2019
In Steel Market Update’s latest raw materials report, Table 1 summarizes the price changes through Dec. 18 of the five materials considered in this analysis. It reports the month/month, 3 months/3 months and 12 months/12 months changes on a percentage basis. Four of the five materials under consideration had a positive price movement in December. Only zinc continued to decline since our November update.
Iron Ore
Based on CRU’s data, the weekly average spot price of 62% fines delivered North China was $94.00 per dry metric ton on Dec. 18, up from $85.00 on Nov. 20. Figure 1 shows the price of 62% Fe delivered North China since January 2009. The price of ore is above the $20 range that prior to February 2019 had existed for a year and a half.
Coking Coal
The price of premium low volatile coking coal FOB east coast of Australia declined each month June through September, then recovered from $133 per metric ton in September to $146 in October before declining to $134 in November and recovering slightly to $136 on Dec. 18 (Figure 2).
Pig Iron
Most of the pig iron imported to the U.S. currently comes from Russia, Ukraine and Brazil with additional material from South Africa and Latvia. In this report we summarize prices out of Brazil and average the FOB value from the north and south ports. The price had a recent peak of $400 per metric ton in May and June last year and has declined erratically ever since with a small recovery to $307.50 in December. The average price in December was 14.0 percent lower than in December last year.
Scrap
To put this raw materials commentary into perspective, we include here Figure 4, which shows the spread between busheling in the Great Lakes region and hot rolled coil Midwest U.S. through mid-December 2019, both in dollars per net ton. The spread collapsed from $564 in August last year to $314 in December 2019 when it recovered from $287 in November. The spread is now at the top end of the range that has been relatively normal for the last 13 years.
Figure 5 shows the relationship between shredded and busheling both priced in dollars per gross ton in the Great Lakes region. This spread was $5 in November and December, the lowest since May 2016.
Figure 6 is a scatter gram of the price of Chicago shredded and the monthly Broad Index value of the U.S. dollar as reported by the Federal Reserve. The latest data for the monthly Broad Index was November. This is a causal relationship with a negative correlation of almost 73 percent.
There is a long-term relationship between the prices of iron ore and scrap. Figure 7 shows the prices of 62% iron ore fines delivered North China and the price of shredded scrap in the Great Lakes region through mid-December 2019. The correlation since January 2006 has been over 79 percent. There was a very unusual divergence in these prices in 2017 and 2018 that benefited the integrated producers, but that situation has now corrected leaving the EAF producers with an advantage on a historical basis.
In the last 11 years, scrap in dollars per gross ton has been on average 3.4 times as expensive as iron ore in dollars per dry metric ton (dmt). A high ratio benefits the domestic integrated producers and a low ratio benefits the EAF producers. The ratio has been erratic since mid-2014, but at 2.8 in December gives a substantial advantage to the EAF producers (Figure 8).
Zinc
The LME cash price for zinc mid-month is shown in Figure 9. The latest data is for Dec. 18 when the price was $1.05 per pound, down every month from March through August with a small rebound since then.
Zinc is the fourth most widely used metal in the world after iron, aluminum and copper. Its primary uses are 60 percent for galvanizing steel, 15 percent for zinc-based die castings and about 14 percent in the production of brass and bronze alloys.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/04/peter-wright.png)
Peter Wright
Read more from Peter WrightLatest in Steel Products Prices North America
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor inches HR price up, aims for $695/ton
Nucor increased its consumer spot price (CSP) for hot-rolled (HR) coil to $695 per short ton (st), up $5/st from last week.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor maintains $690/ton HR base price
Nucor’s weekly consumer spot price (CSP) for hot-rolled (HR) coil is unchanged from last week at $690/ton.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/07/CRU-Logo-2023-07-21-at-4.35.41-PM.png)
CRU: US prices find a bottom as other markets fall
The US sheet market appears to have reached a bottom following consistent weekly declines since April. However, other markets remain weak due to limited demand. Trading in Europe has been slow due to summer holidays. While European mills are also undergoing maintenance outages, these have not been enough to offset ongoing price falls, with weak […]
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Cliffs_logo2.2.png)
Cliffs seeks $700/ton for HR, up $30/ton from last week
Cleveland-Cliffs said on Wednesday that it would seek at least $700 per short ton (st) for hot-rolled (HR) coil. The Cleveland-based steelmaker said it made the move "due to ongoing market developments." The company said the increase was effective immediately for HR orders for September.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/Nucor.png)
Nucor aims for $675/ton for HR
Nucor has raised its consumer spot price (CSP) for hot-rolled (HR) coil to $675 per short ton (st), up $25/st from last week.