US steel mills were successful in partially raising prices in March in a bid to halt a 6-week decline in prices, according to The Steel Index Monthly Steel Review.
AK Steel were, as some predicted, first to raise list prices and in typical fashion other producers followed suit with a mini-mum of US$30/s.ton hikes. TSI’s HRC’s March average closed at US$685/s.ton (-US$31/s.ton, -4.3%), though spot prices rebounded off a 17-week low of US$680/s.ton by US$3/s.ton. Despite this, coil indices shed over US$30/s.ton month-on-month, with all three prices falling below the average for December.
Coil prices moved in opposite directions in the final week, highlighting the uncertainty in the market as to whether price hikes were taking effect for some participants. TSI’s HDG coil reference price moved up US$18/s.ton in the final two weeks to finish at US$829/s.ton, whilst the CR coil spot price partially erased gains made in week 12 (US$779/s.ton). Whilst some transactions moved upwards on TSI’s US HRC index, the market as a whole seems to be lacking the level of anticipatory purchases required.
There was divergence in North European and South European markets with Hot rolled coil spot prices in North easing over the course of March.
The N. European HRC swap listed at LCH.Clearnet (basis TSI) traded several times during the month providing an interesting view of the forward months. Participants are pricing in a decline in the near-term, with Q3 trading at €520/t and later at €515/t as the contract was bid down.
In Turkey, flat prices increased in March, with TSI’s HRC monthly aver-age going up by US$29/tonne to US$706/t. The push for further price hikes by mills was not supported by the end-users as cheaper material is being reported to be still available from stockists. Market activity slowed down closer to the end of the month, with buyers not accepting current price levels due to the rapidity of price rises, HRC price increasing by more than US$50/t since January.
Export prices of Chinese HR coil moved upwards in March, averaging at US$637/tonne (exports to EU/N.A) and US$635/t (exports to Asia), although pace of growth remains slow. Crude output has steadily increased since January as demand from end-user segments picked up. Dollar-Euro movements have helped improve export opportunities to Europe as stocks contin-ue to be drawn down, declining 1.8% (m-o-m), at 18.7m t.
TSI’s latest weekly steel market sentiment survey revealed 26% of respondents expecting price increases for the coming quarter. Com-bined with the previous week, these numbers are a 2012 low, implying some weakness in the market. Spot prices in some longs markets (rebar) have already fallen due to weak demand in construction.
Source: The Steel Index