MMI Raw Steels: Steel Prices Fall As Demand Rises – Steel, Aluminum, Copper, Stainless Steel, Rare Earths, Metal Prices, Forecast
The rise in US steel prices lost momentum when prices for HRC, CRC and HDG began to decline in early May. Plate prices have also fallen sharply.
Overall, the Monthly Crude Steel Metals Index (MMI) fell 8.9% from April to May.
Know what to do when the market changes. Related article: The art of timing your purchase
Iron ore slumps to 4 months of weak demand on concerns
Iron ore prices fell to their lowest level in 4 months on growing concerns over demand amid ongoing lockdowns in China. Meanwhile, fines for iron ore fell to $131.90 on May 10, the lowest since January 31 and a 12.6% drop since the end of March.
According to data from the National Bureau of Statistics (NBS), Chinese steel production fell more than 6% year-on-year in March. In addition to lockdowns and restrictions due to COVID outbreaks, Chinese steel production has faced several other headwinds in recent months. Among them were Olympics-related cuts, which expired in March, and China-specific cuts intentions reduce crude steel production in 2022.
China’s real estate sector also remains a concern. Sunac real estate developer lack a recent bond payment in early May, becoming the latest property developer to default. According to the company, “liquidity issues” played a significant role in their default. Additionally, sales were “significantly impacted by the COVID-19 outbreak.” Indeed, there was a 65% drop in sales from March to April. Prior to Sunac’s default, Zhenro Properties attributed its own default in April to the “unforeseen scale and duration” of shutdowns in Shanghai.
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Whirlpool Trims predicts sales as steel prices fall
On a national level, Tourbillon began to see a slowdown in demand, leading it to cut sales forecast for 2022. After an 8.2% year-over-year sales decline in the first quarter, the sector appliance company said it would remain flat in 2022. This is a major change from its previous growth forecast of 3%. Industry-wide, North American volumes fell 4% year-over-year in the first quarter, although they were still 24% above 2019 levels.
While some see Whirlpool’s slowdown as a warning of what’s to come, US demand through March has appeared strong. In fact, according to the US Census Bureau, new orders for manufactured durable goods saw 0.8% growth in March. Consumer spending also increased 1.1%. These two factors are strong indicators of economic health. Manufacturing, in particular, accounts for about 12% of the US economy.
New orders from manufacturers: Durable goods
Source: United States Census Bureau
Arcelormittal expects a drop of up to 1% in global steel demand in 2022
ArcelorMittal SA recently lowered its estimates for global steel demand. The world’s second-largest steelmaker now expects demand to fall by up to 1% in 2022. They cite the war in Ukraine and China’s zero-COVID policy, which are slowing the global economic recovery and increasing inflationary pressures. This is a big change from their 1% growth forecast before the Russian invasion.
the European Steel Association (Eurofer) has also cut its outlook for steel consumption in the EU in 2022. So far, Europe has borne the brunt of the economic impact of the war in Ukraine. Along with supply chain disruptions and a “worsening energy crisis”, Eurofer now expects consumption to fall by 1.9% in 2022. All this after consumption rebounded by 15, 2% in 2021. However, the organization remains optimistic for 2023, projecting an overall increase of 5.1%.
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- Chinese slab prices fell 5.03% month-on-month to $767 per metric ton on May 1. Meanwhile, the price of Chinese billets fell 7.96% to $699.92 per metric ton.
- Chinese coking coal prices rose 7.63% to $535.64 per metric ton.
- Three-month U.S. HRC futures fell 24.42% to $1,145 a short ton. While the spot price rose 4.56% to $1,405 from $1,405 per short ton. US shredded scrap prices rose just 1% to $606 per short ton.