Steel Products
Iron Ore & Scrap Futures: Up, Up and Away and Firm in a Sideways Market
Written by Bradley Clark
August 9, 2013
Written by: Bradley Clark, Director of Steel Trading, Kataman Metals
TSI Iron Ore: Prices Up, Up and Away…
Iron Ore over the past few weeks remains a true bright spot in the commodities complex as stronger than expected summer steel demand in China has driven prices to highs not seen in months and monthly shipments to all-time highs. July saw 73 million tons shipped to China surpassing the previous record set in December of just under 71 million tons. The increased shipments with ascending prices indicates just how strong demand for steel is in China, a surprise to many as most analysts predicted both finished steel and iron ore demand to be slack in the second half of the year.
The futures market continues to trade higher with nearby months of August and September trading to $134 and $133 respectively, while further down the curve prices move into a steep backwardation. This shape of the curve whereby prices are trading at a discount to the spot price indicates a general market sentiment that the current strength in pricing will deteriorate over time. The cal 14 is trading at $116 a significant discount to the current $133 spot pricing. Time will tell if this plays out. The story of iron ore the past 8 months has been one of surprising strength amid increasing supply.
U.S. Midwest #1 Busheling Ferrous Scrap (AMM) Firm in a Sideways Market
This week the physical busheling market materialized for August with prices remaining unchanged from July. Supply / Demand seemed to be fairly balanced for busheling while shredded scrap came in down $5-10 per ton. The futures market reacted briefly with bids searching for offers with q4 trading up to $387 with bids to repeat but offers not willing to reach below $400 per ton. Against the backdrop of a potentially plateauing finished steel market it will be interesting to see how the scrap market plays out in September.
Volumes have been light on CME with approximately 1500 tons trading over the past couple of weeks. The contract still is working on gaining traction and the lack of volatility of late has kept many would be participants on the sidelines.
Bradley Clark
Read more from Bradley ClarkLatest in Steel Products
SMU price ranges: Steady market ahead of Thanksgiving
SMU's price indices saw minor fluctuations on sheet products this week, while our plate and Galvalume indices held steady.
Plate report: Prices holding at new lows
US plate prices are at their lowest level in nearly four years and mills continue to do what they can to limit the bleeding. Domestic prices are now just a fraction of their all-time high of $1,940 per short ton (st) reached in May 2022, and trending lower.
SMU Steel Demand Index rallies
Steel Market Update’s Steel Demand Index recovered by nearly 10 points last week, though it still remains in contraction territory.
Nucor keeps HR base price steady to end November
Nucor is holding its hot-rolled (HR) coil base price flat at $750/st for the third week in a row.
Domestic CRC prices edge up, import tags mixed
The price spread between US-produced cold-rolled (CR) coil and offshore products on a landed basis widened slightly in the week ended Nov. 22.