The following article on the futures market was written by Andre Marshall, CEO of Crunch Risk, LLC and our instructor for Managing Price Risk I and II workshops. Financial Markets: Too bad we’re not all money managers as life would be pretty easy – just keep your customer long the market, sit back, and enjoy […]
Steel Market Update received a question from one of our readers regarding a comment we made in Tuesday evening’s issue during our analysis of flat rolled steel pricing. The comment was about the domestic mills negotiating away extras and how this was impacting transactional pricing. All of the indexes are suppose to take into consideration […]
The spread between world hot rolled export pricing and that of the domestic average here in the United States is getting smaller based on our analysis of steel pricing data from this week. As the spread shrinks, the competitiveness of imported steel into the United States is reduced. Over time, if the trend continues, the […]
Apparent steel supply for the month of December 2014 was 10,020,704 net tons, the sixth month in 2014 to be above the 10 million ton mark. Steel Market Update calculates our apparent steel supply figure by combining total domestic steel shipments with finished US steel imports and subtracting total US steel exports. December supply represents […]
In the twelve months of 2014, ferrous scrap exports totaled 15,308,000 tonnes (metric tons), down by 17.1 percent from the same period in 2013. In the single month of December scrap exports were 1,056,570 tonnes, down 21.5 percent from November. Figure 1 shows that the three month moving average (3MMA) has been declining slightly for […]
For the week ending February 7th, 2015, the American Iron & Steel Institute (AISI) estimated that the U.S. steel industry produced 1,769,000 net tons (NT) of raw steel, a 0.7 percent decrease over the previous week and a 3.0 percent decrease over the same week one year ago. The estimated capacity utilization rate is 74.8 […]
January steel exports from China in rose to an all-time monthly record of 10.29 million tons, surprising analysts who were expecting reduced shipments this month. Steel shipments were expected to fall after China canceled the export tax rebate for Boron-added steel on January 1. Analysts predicted steel export volume would drop as much 30 percent […]
Import data is reported three times for each month. These reports are licensed, preliminary and final tonnages for each product. The Steel Import Monitoring system has been a widely used tool to provide an advanced look at import volumes using data compiled from import licenses. These licenses can be applied for at any time between […]
As we reported last week, prior to negotiations beginning for the month of February market players were predicting ferrous scrap prices would drop by $30-$50 and then $50-$70 per gross ton. Then we heard prices would drop by $100 per gross ton over the months of February and March combined. When the smoke cleared at […]
The range between indexes shrank this past week as benchmark hot rolled coil price averages dropped to $541 per ton, with SMU and Platts now even at $540 per ton and CRU slightly higher at $543 per ton. We did not include SteelBenchmarker pricing as they only produce pricing twice per month and we have […]
The American Institute for International Steel (AIIS) reports that U.S. steel exports declined 5 percent year over year in 2014. Exports fell 2.6 percent in the last month of the year with a drop in NAFTA exports accounting for most of the November to December decline. AIIS statistics and commentary follows: Falls Church, VA. February […]
The American Institute for International Steel (AIIS) reports steel imports declined for the second consecutive month in December. Despite the month over month reduction, steel imports were 44.4 percent higher than December 2013. AIIS says falling oil prices may support a continued downward trend due to reduced demand for OCTG and line pipe. The full […]
The U.S. Department of Commerce released final foreign steel import license data late last week, showing final December tonnage at 3.64 million net tons (3.30 metric tons). This is a 1.5 percent decrease over November imports but 45.1 percent higher than December 2013 levels. Below is a table comparing November, December, and January steel imports […]
Licensed data for January was updated on February 3rd through the Steel Import Monitoring System of the US Commerce Department. The SMU publishes several import reports ranging from this very early look using licensed data to the very detailed analysis of final volumes by district of entry and source nation which is published in our […]
The domestic steel mills and their ferrous scrap suppliers traditionally negotiate pricing on scrap to be delivered during the first few days of the new month. This means the mills and their suppliers are deep into negotiations regarding February scrap purchases right now. Last week the word amongst the “scrappies,” as well as their mill […]
Even the Cliffs Natural Resources CEO weighed in on the food of foreign steel imports and what the domestic steel industry should do to protect their markets. Lourenco Goncalves is never at a loss for words and his comments made during Cliffs quarterly earnings conference call was no exception. First, the results posted by the […]
For the week ending January 31, 2015, the American Iron & Steel Institute (AISI) estimated that the U.S. steel industry produced 1,782,000 net tons (NT) of raw steel, a 2.4 percent decrease over the previous week and a 2.3 percent decrease over the same week one year ago. The estimated capacity utilization rate is 75.4 […]
United Steel Workers in the oil industry went on strike on Sunday after failing to agree on new labor contracts. The strike will affect approximately 3,800 employees at nine U.S. sites. It is the largest national USW walkout since a 1980 strike that lasted three months. About 10 percent of the oil refinery capacity will […]
Mark Millett, CEO of Steel Dynamics pointed out the inconsistencies in the steel prices being referenced by two of the steel indexes followed by Steel Market Update. Millett spoke about the erosion of pricing and referenced the indexes in this comment, “…But I think our optimism is that American pricing has eroded and it has […]
The spread between world hot rolled export pricing and that of the domestic average here in the United States is shrinking based on our analysis of steel pricing data from this week. As the spread shrinks, the competitiveness of imported steel into the United States is reduced. Over time, if the trend continues, the domestic […]
The fall in hot rolled futures prices seems to have slowed with the CRU down only $6/ton this week compared to an $18/ton drop the week prior. The second half of the year seems to have stabilized with trades being done at $570-575/ton for Q3 and Q4. The near term remains softer with bids retreating […]
Steel imports continue to flood U.S. shores and were a priority issue for CEOs during earnings calls this month. Low cost imports are creating competition for market share as well as depressing prices in the carbon steel spot market. Nucor CEO John Ferriola summed up the current market condition: “The other major headwind is from […]
“Where does the elevator stop,” is what one flat rolled steel buyer told Steel Market Update during a phone conversation about pricing held earlier today. “I haven’t hit the panic button yet, but my finger is close…” Flat rolled steel prices continued to tumble as some mill salespeople were telling their customers they have been […]
AK Steel and Nucor spend time on their earnings conference calls earlier today to point out the negative impact imports were having on their business and steel pricing. James Wainscott talked about imports during his opening statements, “Between 2013 and 2014 flat-rolled finished carbon steel imports rose by some 60%. For the year, we saw […]
Spot iron ore prices in China, which saw a small spike in prices right around the beginning of the New Year, have since continued their slide with 62% Fe fines being reported at $62.8 per dry metric ton (dmt) earlier today by The Steel Index (CFR Tianjin). Iron ore is down 11 percent since the […]
During Nucor’s earnings conference call the company’s CEO, John Ferriola told the analysts that scrap prices would drop “dramatically” during the 1st Quarter 2015. He told the analysts that steel prices have already gone down and scrap prices “have to” follow. Our scrap sources are telling us that lackluster demand at the steel mills, weak […]
The American Iron & Steel Institute (AISI) recently reported final raw steel production estimates for the month of December 2014. This estimation is different than the weekly raw steel production as it is based on 75 percent of the domestic mills reporting vs. 50 percent for the weekly estimates. Total raw steel production for the […]
For the week ending January 24, 2015, the American Iron & Steel Institute (AISI) estimated that the U.S. steel industry produced 1,825,000 net tons (NT) of raw steel, a 1.1 percent increase over the previous week and a 0.1 percent increase over the same week one year ago. The estimated capacity utilization rate is 75.9 […]
According to the flat rolled steel price indexes followed by Steel Market Update, many of the flat rolled steel products are seeing their mill pricing erode by $10 per ton or more this past week. The spread between the indexes is relatively modest on hot rolled coil, but is much more pronounced in cold rolled, […]
Ice is rapidly advancing and taking hold of the Great Lakes and the connecting river systems (St. Mary’s, St. Clair and Detroit) between the Great Lakes’ reducing or eliminating transit for iron ore carriers on their way to AK Steel, ArcelorMittal and U.S. Steel’s fully integrated steel mills in the northern portion of the United […]