By CRU Senior Analyst Erik Hedborg, from CRU’s Crude Steel Market Outlook The iron ore market in 2019 has been dominated by supply disruptions. The Vale accident in January was followed by cyclones in Australia and, more recently, quality issues affecting Rio Tinto, the second largest iron ore producer in the world. The company has […]
By Senior Analyst Ryan McKinley, from CRU’s Steel Metallics Monitor The CRU metallics price indicator (CRUmpi) rose by 7.5 percent m/m to 195.7 (see chart) after prices rose in most markets. The most pronounced rebounds were in the U.S. and European scrap markets, while prices in Asia either rose or were stable. Prices in regions […]
ArcelorMittal reported a third-quarter net loss of $539 million—its second quarterly loss in a row as the global steel and mining company faced lower shipments and weak steel prices in markets all over the world. “As anticipated, we continued to face tough market conditions in the third quarter, characterized by low steel prices coupled with […]
By CRU Principal Analyst Chris Asgill There has been a marked rise in Chinese imports of pig iron and HBI this year. This has been primarily due to limited domestic scrap supply that cannot be offset by external supply due to restrictions in scrap imports. Limited scrap supply relative to demand has meant that scrap prices in […]
By CRU Senior Analysts Ryan McKinley (USA), Ryan Smith (Australia) and Erik Hedborg (UK) Part three of our three-part series: What’s next for U.S. iron ore production? In parts one and two of our series, we examined the U.S. iron ore industry and reviewed recent market developments. We also explored the dependency of U.S. iron […]
By CRU Analyst Alexander Ordosch Last week, Turkish scrap import prices were assessed at $248 /t CFR for HMS 80:20. Only one deal was assessed from Europe, after strong restocking activity over recent weeks. Prices have been rising in recent weeks as sellers have pushed for gains as it had become uneconomic to supply at the lower prices […]
SMU contributor Gaurav Chhibbar is a partner at Metal Edge Partners, a firm engaged in Risk Management and Strategic Advisory. In this role, he and his firm design and execute risk management strategies for clients along with providing process and analytical support. In Gaurav’s previous role, he was a trader at Cargill spending time in […]
AK Steel eked out a net income of $2.8 million in the third quarter, down from $66.8 million in Q2 and $67.2 million in Q3 2018. Included in net income was a $15.3 million mark-to-market loss from iron ore derivatives. Net sales of $1.5 billion fell 12 percent year-over-year and 9 percent from the second […]
This report is designed to be a big picture summary of data we have reported in detail during the month. It summarizes 36 data streams that describe the state of the steel market and provide forward guidance for steel buyers and sellers. See the end of this piece for an explanation of the Key Indicators […]
By CRU Senior Analyst Erik Hedborg Iron ore prices have increased slightly overall in the past week despite early gains being met with falling prices at the start of this trading week. On Tuesday, Oct. 29, CRU assessed the 62% Fe fines price at $87.0 /t, a $2.0 /t increase w/w. Australian supply has continued […]
Weak steel prices and plummeting pellet premiums cut earnings significantly at Cleveland-Cliffs in the third quarter of 2019, but the company still beat analysts’ expectations. Revenues fell to $556 million compared to $742 million a year ago that included a one-time gain of $228 million due to a change in foreign currency translation. Third-quarter net income was […]
The U.S. dollar has strengthened against 12 of the 16 steel trading nation currencies in the last three months and against eight in the last month. In this report we examine the change in currency values of the 16 preeminent global steel and iron ore trading nations. The currencies of these 16 don’t necessarily follow […]
Compared to three months ago, all five of the raw materials prices considered in this report declined in October. Compared to September, there was a recovery in the prices of coking coal and zinc. Table 1 summarizes the price changes through Oct. 16 of the five materials considered in this analysis. It reports the month/month, […]
By CRU Analyst Jordan Permain The iron ore price suffered its biggest weekly fall since August as market participants showed caution in the face of bearish signals in China. On Tuesday, Oct. 22, CRU assessed the 62% Fe fines price at $85.00 /t, a $6 /t w/w decline. Despite a w/w increase in nationwide BF […]
Lack of demand for ferrous scrap, especially in the Ohio Valley and Chicago market, forced prices down another $30-40/GT for October, on top of a similar decline in September, sources tell Steel Market Update. Scrap prices are their lowest in years, dropping eight out of the last 10 months. Shred prices today are around $215/GT, […]
By CRU Steel Prices Lead Anh Nghiem China returned to the market on Tuesday from their national holidays, but the market remained stable with mixed signals from the China Futures market, i.e. a 1 percent increase in the iron ore futures market while the steel futures market showed a 2 percent decline on the first […]
By CRU Principal Analyst Josh Spoores and Analyst Ryan Smith U.S. Steel has announced a 49.9 percent stock acquisition with an option to acquire the remaining 51.1 percent within the next four years, in smaller rival U.S. flat products new entrant Big River Steel. In its announcement, U.S. Steel labelled this acquisition, alongside its investment […]
The news today that U.S. Steel plans to purchase a 49.9 percent interest in Big River Steel, with an option to buy the rest within the next four years, surprised the market. But most of the steel buyers polled by Steel Market Update view the pairing of one of the nation’s oldest integrated producers with […]
The net situation changed little from August but the Treasury 10/2 yield spread became slightly positive on Sept. 27 and the SMU Steel Buyers Sentiment Index suffered a serious setback on Sept. 15. This report is designed to be a big picture summary of data on which we have reported in detail during the month. […]
Raw materials prices were erratic in September with four of the five considered here experiencing price reversals since August. Table 1 summarizes the price changes through Sept. 25 of the five materials considered in this analysis. It reports the month / month, 3 months / 3 months and 12 months / 12 months changes on […]
Editor’s note: The Chinese government currently bars exports of ferrous scrap to other parts of the world to assure China of an adequate domestic supply. As this analysis by CRU Principal Analyst Chris Asgill points out, China’s economy will eventually generate a scrap supply that far exceeds its scrap consumption, opening up the doors to […]
Mexican steel producer AHMSA is seeking a way out of its financial difficulties including a possible sale of the company, according to various press reports. Altos Hornos de México is recovering from a corruption scandal that rocked company finances and coincided with a downturn in market conditions. Board of Directors President Alonso Ancira was accused […]
Virgin steel is made with iron ore, coke and limestone. It was done that way, and only that way, for many decades. Then along came the “mini” mills. So-called minimills recycle ferrous scrap, mixing it with pig iron or other iron units and melting it down in large electric arc furnaces to produce new steel. […]
Virgin steel is made with iron ore, coke and limestone. It was done that way, and only that way, for many decades. Then along came the “mini” mills. So-called minimills recycle ferrous scrap, mixing it with pig iron or other iron units and melting it down in large electric arc furnaces to produce new steel. […]
The U.S. dollar has weakened against 11 of the 16 steel trading nation currencies in the last month and against eight in the last three months. In this report we examine the change in currency values of the 16 preeminent global steel and iron ore trading nations. The currencies of these 16 don’t necessarily follow […]
By CRU Principal Analyst Chris Asgill The pervasiveness of steel market weakness came to the fore this month, particularly for steel long products, leading to a sharp drop in scrap prices in almost every market we assess. Consequently, the CRU metallics price indicator (CRUmpi) dropped by 8.3 percent m/m to 209.4 (see chart), the lowest level since November […]
The following article discussing the global ferrous derivatives markets was written by David Feldstein. As an independent steel market analyst, advisor and trader, we believe he provides insightful commentary and trading ideas to our readers. Note that Steel Market Update does not take any positions on HRC or scrap trading, and any recommendations or comments […]
By CRU Analyst Ryan Smith Operating costs for flat-rolled minimill producers have dropped in 2019 as weaker steel markets have pulled down metallics prices. This has meant that operating costs for minimills are now in line with integrated producers in the USA. However, the current cost level is not expected to be maintained. (See related […]
“If you want to be successful in this business you need to understand the market you serve,” said Cleveland-Cliffs CEO Lourenco Goncalves at the Credit Suisse Basic Materials Conference on Tuesday. Goncalves appears to know what he is doing, having transformed Cleveland-Cliffs from a failing enterprise into a solid business with a unique market position. […]
By CRU Senior Analyst Erik Hedborg Part two of our three-part series: What’s next for U.S. iron ore production? After a remarkably profitable 2018, the U.S. steel industry has suffered a setback in 2019 as steel prices have dropped sharply on weaker than expected demand. Steel margins have turned negative and production cuts have been […]