Thursday, October 29, 2015

Global Steel Price down 26% YoY

Very bearish YoY report and projected continued bearish.

Flat product transaction prices in the United States have plummeted to lows not seen since the last recession in 2009. Global oversupply is leading to strong import competition, heightened by the strength of the US dollar. expect the negative price trend to continue. There is no urgency to build stocks since domestic mill delivery lead times are short and the availability of third country material at the ports is plentiful. Service centre inventories are on the high side, as a result of slow sales to end-users, who are keeping their stocks as low as possible.

People's Steel Company dumping on steroids as the People's Central Bank gladly changes them out of their foreign currency balances at a continuing fixed and favorable rate of CNY:

Chinese participants have now returned to the market... only to see steel prices continue on their negative path. The main issue is one of oversupply, as growth in the economy slows. Local steel demand appears to be peaking. We have yet to see any significant production cuts, despite many steelmakers operating at a loss. Producers are increasingly focussing on overseas sales. Export volumes are likely to remain high until anti-dumping duties start to bite.


NeilW said...

This is having domestic impact in the UK with the closure of the Redcar and Scunthorpe steelworks - representing the end of substantial steel making in the UK.

The Labour Party and the Unions are organising demonstrations and lobbying government for action.

The lack of anti-dumping action from the EU is astonishing.

Matt Franko said...

"Free markets!" Neil....

Tell those UK Labour/Union people to try cutting back to only 2 rations of dog brain soup per day instead of the current gluttonous 3... get more "competitive" already!