Steelmaking raw material prices stabilize through November

Table 1 (click to expand) shows the latest prices for each product and their changes from recent months.

Iron ore

Chinese iron ore fines (62% Fe, delivered North China) have held at just over $100 per dry metric ton (dmt) for over four months. As of Nov. 17, it is priced at $104/dmt, down 1% compared to the prior month (Figure 1). Iron ore has increased 2% from three months ago and is 5% higher than it was this time last year.

Coking coal

Premium hard coking coal has trended up in recent months, but remains within the narrow range it has traded in since the start of the year. As of Nov. 17, prices are up 3% m/m to $195/dmt (Figure 2). Coking coal prices are up 2% from those seen three months ago, but 5% less expensive than year-ago levels.

Pig iron

Brazilian pig iron prices held steady at $398/dmt in November, resting at a near-five-year low. Recall that after falling to a four-year low of $415/dmt at the beginning of the year, prices briefly rebounded in March through May, then slipped again in June (Figure 3). Pig iron has declined 4% over the last three months and is 11% cheaper than it was one year ago.

Last week, Stephen Miller wrote an article examining the slowing US pig market. Read it here.

Note that this report uses Brazilian pig iron prices, now the main source of US imports rather than Russia and Ukraine, averaging prices from the country’s northern and southern ports.

Scrap

After falling in September and October, steel scrap prices were unchanged in November. SMU’s September shredded scrap index held at $370 per gross ton (gt), and our busheling index remained at $390/gt. Scrap prices are 3-8% lower than they were three months prior and 4-5% lower than this time last year (Figure 4). Earlier this week, we published an outlook showing the market may be picking up steam.

Fluctuations in scrap and iron ore prices provide insight into the competitiveness of integrated (blast furnace) mills, whose primary feedstock is iron ore, versus mini-mills (electric arc furnace), whose primary feedstock is scrap. To compare these two mill materials, SMU divides the shredded scrap price by the iron ore price to calculate a ratio. A higher ratio favors integrated mills, a lower ratio favors mini-mill producers (Figure 5).

Integrated mills had generally held the cost advantage from early 2022 through the middle of 2023, then it briefly shifted to mini-mill producers through early 2024. In late 2024 we saw the advantage shift back to integrated mills and stay there through the first few months of this year. Since peaking in March at 4.50, the ratio has trended lower again, now standing at a neutral 3.56 as of Nov. 17.

Zinc and aluminum

Zinc and aluminum are used in some coated steel products. Fluctuations in spot prices can prompt steel mills to adjust their galvanized and Galvalume coating extras.

Zinc prices have steadily climbed over the past seven months, reaching a near-three-year high of $1.47/lb in late October. After marginally easing in early November, the latest weekly LME zinc cash price is back up to $1.47/lb as of Nov. 17. Prices have risen 17% over the past three months and are up 9% from this time last year (Figure 6).

Aluminum spot price movements have mostly mirrored zinc this year, though the aluminum Midwest Premium (MWP) has surged since February. The latest weekly LME cash price is $1.27/lb as of Nov. 17, 2% lower than the three-and-a-half-year high of $1.30/lb set three weeks ago. Prices have increased 9% in the last three months and 8% year on year (y/y).

The weekly average aluminum MWP reached $0.88/lb in early November and has ticked one cent lower to $0.87 as of Nov. 17. The MWP has increased 23% over the past three months and is up 306% y/y. The all-in Midwest aluminum price now totals $2.14/lb, one of the highest rates in our limited six-year data history (Figures 6 and 7).