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
Final Thoughts
The difference: The spat with Turkey was a big deal for steel. This time, the 50% reciprocal tariff for Brazil – if it goes into effect as threatened on Aug.1 – hits everything from coffee and to pig iron. It seems almost custom-built to inflict as much pain as possible on Brazil.
CRU: US rebar and wire rod prices rise alongside S232 increase
CRU Senior Steel Analyst Alexandra Anderson discusses current market and pricing dynamics for long steel products in the US.
CRU: Excessive global supply could hit rebar mill investments in US
Following the onset of the war in Ukraine in March 2022, concerns about import availability and expectations of rising demand from President Biden’s Infrastructure Bill pushed US rebar prices to record highs. In response, a flurry of new mills and capacity expansions were announced to meet the rise in demand from growth in the construction […]
Steel buyer spirits tempered by soft spot market conditions
Steel sheet buyers report feeling bogged down by the ongoing stresses of stagnant demand, news fatigue, tariff negotiations or implementation timelines, and persistent macroeconomic uncertainty.
CRU: US stainless prices to rise on expanded S232 tariffs
Stainless prices in the US market will rise, following price increases by major US producers. Our base case scenario incorporates higher US prices in the near term, despite the initial negative reaction by the market. US stainless prices will go up in 2025 H2 and will stay elevated in 2026 as tariffs on stainless […]