Steel Products Prices North America

CRU: Iron Ore Falls Back Below $100/t in a Volatile Market
Written by Tim Triplett
June 9, 2019
By CRU Senior Analyst Erik Hedborg
Iron ore prices went through a correction in the past week as Chinese steel prices kept falling and seaborne supply remained robust. On Tuesday, June 4, CRU assessed the 62% Fe fines price at $98.50 /t, a $9.50 /t fall w/w.
Our sources see the price fall as a market correction after the futures market pushed prices up to $108 /t last week on the potential of trade wars resulting in further Chinese stimulus. In the past week, signs of weakness on the demand side have emerged as steel prices have continued their downward trend and steelmakers have reported increased inventories of finished steel products. Steelmakers have also seen their margins getting squeezed in recent weeks as both HRC and rebar producers are now making margins in the 0–5 percent range.
Seaborne supply has improved considerably. Shipments from Para (Vale’s Northern System) have recovered to levels seen before the heavy rainfall in March-May and Rio Tinto is now shipping at full rate. Our tracking of Port Hedland shipments have in the past week registered the second highest level in the past year as all major producers have been shipping above nominal capacity.
The key event that has caught attention in the past week is the collapse of the mine wall at Vale’s Gongo Soco mine in Minas Gerais. There have been fears that a sudden wall collapse would generate seismic movements that would cause the Sul Superior dam, located 1.5 km away, to breach. On Friday, the first fragments of the wall fell into the mine pit without causing any major impact. Since then, the wall has slowly disintegrated into the mine pit, which means the risk of a breach at the Sul Superior dam is diminishing. Sul Superior is an upstream dam containing 6 million m3 of tailings, which makes it smaller than the two upstream dams that have collapsed in the past four years – Vale’s Feijão dam (12 million m3) and Samarco’s Fundão dam (55 million m3).
Our indicators below give mixed signals for the price direction in the coming week. Strong supply and continued weakness in the Chinese steel industry will limit the upside to iron ore prices. However, the low inventories at ports and mills will reduce the downside risk for prices. Therefore, we expect prices to remain STEADY in the coming week.

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

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.

SMU Price Ranges: HR holds, galv slips amid competing market narratives
SMU’s sheet and plate prices see-sawed this week as hot-rolled (HR) coil prices held their ground while prices for galvanized product slipped.