Steel Products Prices North America

CRU: Further Disruption to Vale Supply Keeps Iron Ore Prices High
Written by Tim Triplett
May 7, 2019
By CRU Analyst Michelle Liu
Vale confirmed the suspension of tailings disposal at its Brucutu mine on Tuesday, May 7. After prices fell initially, there was a price rebound and the iron ore price ended up rising by $0.80 /t w/w to $94.90 /t for our assessed 62% Fe fines.
On Tuesday, Brazil’s higher court overwrote its lower court’s ruling for the resumption of tailings disposal at the Laranjeiras tailings dam, which is used by the Brucutu mine. Consequently, wet beneficiation operations for Brucutu were stopped, but mine production is still in place, although with reduced output and lower quality as a result of limited beneficiation. Brucutu is the second largest iron ore mine belonging to Vale, producing 30 Mt in 2018. A large part of the production is pellet feed to its Tubarão pellet plants. In contrast to the supply disruption in Brazil, Australian miners are exerting all efforts to get shipments back to maximum levels after weather-related disruptions in March. Port Hedland shipments continued to inch up over the week, led by strong supply by FMG.
Robust demand from China contributed to the price increase as well. BF utilizations were at a multi-year high last week, but steel prices remained stable, indicating healthy underlying steel consumption.
However, hiccups in the China-U.S. trade talks have encouraged speculation that a new round of tariffs on Chinese exports to the U.S. could take effect as early as this week. Upon this news, the RMB hit a four-month low against the U.S. dollar, depreciating by half a percent in the past two days—a big daily movement for the Chinese currency. Weakened RMB is likely to put downward pressure on imported prices and make buyers hold off purchases of oversea goods. Hence, we expect iron ore prices to be STEADY in the next week with weaker demand from China offsetting weaker supply from Brazil.
Explore this topic further with CRU.

Tim Triplett
Read more from Tim TriplettLatest in Steel Products Prices North America

SMU Price Ranges: Sheet floor holds as market debates upside
Our average HR coil price increased $5/short ton from last week, marking a second consecutive week of modest gains. Market participants generally attributed the increase to...

Thin demand keeps plate prices hovering at lowest levels since February
Participants in the domestic plate market say spot prices appear to have hit the floor, and they continue to linger there. They say demand for steel remains thin, with plate products no exception.

SMU Price Ranges: HR crawls back to $800/ton
SMU’s HR price stands at $800/st on average, up $5/st from last week. The modest gain came as the low end of our range firmed, and despite the high end of our range declining slightly.

SMU successfully completes IOSCO review
SMU has successfully completed an external review of all our prices. The review has concluded that they algin with principles set by the International Organization of Securities Commissions (IOSCO).

Domestic plate prices could heat up despite so-so demand, market sources say
Some sources also speculated that plate could see further price increases thanks to modest but steady demand, lower imports, mill maintenance outages, and end markets less immediately affected by tariff-related disruptions.