By CRU Analyst Ryan Smith Operating costs for flat-rolled minimill producers have dropped in 2019 as weaker steel markets have pulled down metallics prices. This has meant that operating costs for minimills are now in line with integrated producers in the USA. However, the current cost level is not expected to be maintained. (See related […]
By CRU Senior Analyst Ryan Smith Most people believe that minimills, which remelt scrap in electric arc furnaces, have a big cost advantage over integrated mills, which feed ore and coking coal into giant blast furnaces. But such conventional thinking is an oversimplification of the cost comparison. Based on site costs alone, and where steelmaking […]
Following on a small $20 increase in August, ferrous scrap prices for September are down $30 to $40 per ton as U.S. mills adjusted to lower demand and planned for upcoming fall shutdowns. “Prices fell this month amid a confluence of factors including ample supply, a weakening export market and mill outages,” reported CRU North […]
Do plans by U.S. mills to add millions of tons of new steelmaking capacity over the next few years make a price-killing supply glut inevitable? That’s a question very much open to debate, as shown by the spirited exchange between three leading analysts during Steel Market Update’s Steel Summit Aug. 28 in Atlanta. Despite some […]
By CRU Senior Analyst Erik Hedborg Part two of our three-part series: What’s next for U.S. iron ore production? After a remarkably profitable 2018, the U.S. steel industry has suffered a setback in 2019 as steel prices have dropped sharply on weaker than expected demand. Steel margins have turned negative and production cuts have been […]
I am technically on vacation this week so my Final Thoughts will be brief, and I will rely on Senior Editor Tim Triplett to handle these duties for the balance of this week. I have heard from a number of buyers this week telling me that their business is slowing, and the interest by end […]
The following calculation is used by Steel Market Update to identify the theoretical spread between foreign hot rolled steel prices (delivered to U.S. ports) and domestic hot rolled coil prices (FOB domestic mills). We want our readers to be aware that this is only a “theoretical” calculation as freight costs, trader margin and other costs […]
By CRU Senior Analyst Erik Hedborg Part one of our three-part series: What’s next for U.S. iron ore production? The U.S. is blessed with a wealth of natural resources, including oil, gas, gold, copper, timber and coal. In addition, the country has large iron ore deposits that have supported its steel industry for more than […]
By CRU North America Analyst Ryan McKinley U.S. long product price declines were limited for most products in September after finding support from the scrap market, but downward pressure continues to mount. Even with scrap prices rising by $20 /l.ton in August, persistent price falls throughout the year have yet to spur buyers’ interest amid high […]
Steel Market Update is making adjustments to our Price Momentum Indicators on hot rolled, cold rolled, galvanized and Galvalume steels. The pressure behind rising steel prices seems to be subsiding as lead times at most mills are reasonable (especially considering the maintenance schedules in place for September and October). Steel buyers are beginning to tell […]
The effectiveness of the Trump administration’s Section 232 tariff gets mixed reviews. The 25 percent tariff has contributed to a 13 percent reduction in steel imports this year, easing the competitive pressures on domestic mills. But after an initial spike in steel prices last year, and record earnings by the mills, the price of finished […]
By CRU Principal Economist Lisa Morrison The last month has been interesting from a forecast standpoint given the reversal in the Fed’s monetary policy stance at the end of July, new developments in the U.S.-China trade war and a shift in currency policy in China. Through all this policy change, we continue to see a […]
By CRU Senior Analyst Erik Hedborg Iron ore prices have bounced back in the past week with a rally on Monday pushing prices back above $90 /t. Renewed market confidence resulted in futures on the Dalian commodity exchange hitting limit up in Monday trading. Steel prices in China have been stable throughout the week, which […]
By CRU Senior Analyst Paul Wiggers de Vries Lessons learned from the mining boom saw zinc miners cut back site costs over 2015, 2016 and 2017 in the face of lower zinc prices. However, in 2018, cost controls were relaxed and cost inflation returned. In 2019, cost inflation will remain, but miners will reduce site […]
As I write my “final thoughts” for Tuesday evening’s issue of Steel Market Update, I am in Stuart, Fla., and there is a hurricane located about 80 miles due east in the Bahamas. It is Monday and I expect there will be limited power or mobility come Tuesday, so I am trying to be a […]
For the 1,078 individuals who attended our conference on Monday through Wednesday of this week—first, we thank you for your business, your support, your kind words and for carrying the message back to your respective companies. We had a great conference. There can always be improvements. We constantly strive for perfection, so look for an […]
Steel demand will continue to weaken into 2020, but will bottom next year and set the stage for an inventory rebuild and rising consumption beginning in the second half, predicted CRU Principal Analyst Josh Spoores in his remarks Monday during Steel Market Update’s Steel Summit in Atlanta. U.S. industrial production is currently growing at just […]
By CRU Senior Analyst Manjot Singh China has been at the center of coal price upcycles that have taken place this millennium. The commodity supercycle that characterized the early-2000s was fueled by demand growth, especially in emerging markets like China. That bull market reached a peak in 2011 when slowing demand growth was met with […]
The price of iron ore corrected in August with a $32 per dry metric ton decline, while the four-month-long decline in the price of scrap reversed slightly. Table 1 summarizes the price changes through Aug. 21 of the five materials considered in this analysis. It reports the month / month, 3 months / 3 months […]
By CRU Senior Analyst Manjot Singh Coking coal prices have remained steady for another week on the back of mixed signals on the demand side and abundant supply from Australia. On Aug. 27, CRU assessed the Premium HCC, $0.5 /t lower w/w at $154.5 /t, FOB Australia. There were more deals concluded by Chinese buyers […]
By CRU Senior Analyst Erik Hedborg Iron ore continued to fall in the past week as weakness in the Chinese steel market continued with steel prices declining further. Iron ore spot offers also rose over the last week. On Tuesday, Aug. 27, CRU has assessed the 62% Fe fines price at $84.00 /t, a $4.30 […]
The steel industry enjoyed a profitable first half of 2018 due to a strong economy and tariffs on imports that drove up domestic prices. The welcome windfall prompted several companies to commit large investments toward expansion and modernization of their facilities. In all, about 31 million net tons of new steel capacity could potentially come […]
By CRU Principal Economist Lisa Morrison and Senior Analyst Erik Hedborg In the past month, we have seen sharp declines in global commodity prices, including steelmaking raw materials. The fall was triggered by an escalation of the U.S.-China trade war, but CRU’s research shows that supply and demand fundamentals in the markets also contributed to […]
Temperatures in Atlanta were in the high 70’s today under cloudy skies. The forecast for the next few days is for temperatures to be in the low 80’s on Monday and then climbing to the high 80’s by Wednesday. There is a chance of showers/thunderstorms on Monday and Tuesday, but they should be gone come […]
The following calculation is used by Steel Market Update to identify the theoretical spread between foreign hot rolled steel prices (delivered to U.S. ports) and domestic hot rolled coil prices (FOB domestic mills). We want our readers to be aware that this is only a “theoretical” calculation as freight costs, trader margin and other costs […]
The following article discussing the global ferrous derivatives markets was written by David Feldstein. As an independent steel market analyst, advisor and trader, we believe he provides insightful commentary and trading ideas to our readers. Note that Steel Market Update does not take any positions on HRC or scrap trading, and any recommendations or comments […]
By CRU Principal Analyst Josh Spoores and CRU North America Analyst Ryan McKinley North America, primarily the U.S., was an outlier to global price trends for scrap and sheet products this month. Multiple mill price increases for sheet have been primarily successful, although current prices remain well below the most recent mill targets of $630 […]
I have been traveling all day, so I have had limited exposure to the market today. For that matter, as I have mentioned on a couple of recent occasions, I have been almost entirely focused on the 2019 SMU Steel Summit Conference. So, here are a few comments about the conference for those of you […]
By CRU Senior Analyst Erik Hedborg Iron ore prices continued to decline in the past week as margins in the Chinese steel industry continued to decline on weak steel demand and high production levels. On Tuesday, Aug. 20, CRU has assessed the 62% Fe fines price at $88.30 /t, a $2.00 /t decline w/w. The […]
By CRU Analyst Iris Speelmanns Last week, Turkish scrap prices slid further, dropping by $9 /t w/w to $281 /t CFR for HMS 80:20, based on one 40 kt deal from Europe. This new price level is the lowest level since the brief drop in mid-June and before that the distinct, though brief, weakness last winter. Weaker global […]