STEEL MARKET SUMMARY - May
Transcript of STEEL MARKET SUMMARY - May
Long Products Flat Products News Stainless Steel Scrap Metal Ferro Alloys
ASNVol. 4Issue 9May 2021
Australian Steel News
STEEL MARKET SUMMARY - May
China Rebate Withdrawal To Raise Steel Prices
As if steel pricing and supply line chaos wasn´t enough to drive steel buyers and
consumers around the bend, China has upped the ante by removing its VAT rebate
on 146 exported steel products – effective May 1st. The products from which the
rebate of 13% has been removed include: HRC, hot-rolled sheet, plate, rebar, wire
rod, colour-coated steel and cold-rolled sheet with 0.5-3.00mm and below 0.5mm
thickness. China made no changes to rebates for duties on exported cold-rolled coil
and hot-dip galvanised steel. The rebate cut, which was forecast by Australian Steel
News, is widely expected to put upward pressure on world steel prices and to alter
steel trade flows in the midst of a global boom. The volume of steel enjoying the
now-cancelled rebates was more than 44 million metric tonnes in 2019, according to
Kallanish Commodities. That´s more than two thirds of total steel exports
In a separate announcement, the central government´s Finance Ministry also
entirely removed the import duty on pig iron, crude steel and recycled steel (ferrous
scrap). “The measures will reduce the cost of importing, expand the import of iron
and steel resources and lend downward pressure to domestic crude steel output,
guiding the steel industry towards the reduction of overall energy consumption,
while promoting the transformation and high-quality development of the steel
industry,” the Ministry said.
When the rebate removal was announced last week, many commentators rushed to
predict steel prices would automatically and immediately rise by 13%. However, that
remains to be seen. At least one Beijing-based steel analyst told S&P Global Platts
that he expects the rebate cancellation to have little impact on both China´s steel
export prices and volume in the near term, saying: “Most of the Chinese mills, when
signing export deals recently, had already factored in the possible cancellation.” The
recent price hikes by Chinese exporters would seem to support the notion they were
expecting the rebate to be removed. However, even with a full 13% increment,
Chinese steel exports could remain competitive in a climate where global demand
has been recovering and supply has been limited. Additionally, other market players
are likely to take this opportunity to raise their own export prices. Turning to scrap
prices, our Long Products graph shows the LME steel scrap price for May 3. The
next day it jumped by US$45 to $474 as seen in our Scrap Metal Prices graph.
The spanner in the works created by China´s export rebate decision came two
weeks after the World Steel Association (WSA) released its Short Range Outlook for
2021 and 2022. The WSA forecasts global steel demand will grow by 5.8% in 2021
and by a further 2.7% in 2022 to 1,924.6 million metric tonnes. Specifically, the
report says China´s steel demand is expected to grow by 3.0% in 2021 but that it
will decelerate to 1.0% in 2022 as the effect of the 2020 stimulus subsides. In the
advanced economies, a recovery in demand this year of 8.2% will be followed by
4.2% growth in 2022. However, steel demand in 2022 will still fall short of 2019
levels. The WSA also forecasts global construction will....(Click to continue reading)
“Key Indicators, Pricing and News for the Australian Steel Industry”*
RBA Holds Interest Rates – May 4
The Reserve Bank of Australia has kept interest rates on hold and has flagged the possibility of more stimulus ahead.RBA – Monetary Policy Decision
583600
770
869
608 591
702
764
554563
656643 639
532
632 632650 690
372
423
387
471 460429
300
400
500
600
700
800
900
Dec 1st Jan 1st Feb 1st Mar 1st Apr 1st May 3rd
Long Products – Construction Steels
Wire Rod
Rebar China
Rebar Turkey
Rebar SE Asia
Scrap Turkey
Building Approvals Trend Up - May 5
Dwellings approved rose 17.4% in March, following at 20.1% rise in February. NSW saw a 26.9% rise and Victoria a 24.7% rise.ABS – Building Approvals, Australia
Australian Construction & Economic Data
New Loans At Record Level – May 4
New loan commitments for housing rose 5.5% in March, seasonally adjusted, to a new record high of $30.2 billion.ABS – Lending Indicators
Private Home Starts Rise – April 14
New private sector house starts rose by 26.6% to a 20-year high of 33,761 dwellings in the December quarter.ABS – Building Activity, Australia
Prices are displayed in USD per tonne. See Key to Prices for full product description.
690
797 768 788840
950
830
996 970
1150
1286
1540
591
654 629695
770
568634 608
920
540
645
730
880
346 434 452 458421
454300
500
700
900
1100
1300
1500
Dec 1st Jan 1st Feb 1st Mar 1st Apr 1st May 3rd
Flat Products – Manufacturing Steels
HDG Shanghai
HRC NorthAmerica
HRC SE Asia
HRC China
Slab SE Asia
FeedstockIndex*
* The Feedstock Index is the cost of iron ore, coking coal and scrap metal in one tonne of steel made via the BOF process. To see a full explanation of ASN´s Feedstock Index, click here.
Prices are displayed in USD per tonne. See Key to Prices for full product description.
ANTI-DUMPING NEWS
Measures already in place:
ADC - MeasuresUpdates to the public record:
ADC - UpdatesRecent anti-dumping actions:
ADC - Actions
Request a weekly update from theAustralian Government Anti-Dumping
Commission website: here.
372
423
387
471 460474
102 102
160
125112 109
124
174
156
172157
183
50
100
150
200
250
300
350
400
450
500
Dec 1st Jan 1st Feb 1st Mar 1st Apr 1st May 4th
Steel Raw Materials Prices
Steel Scrap Turkey Coking Coal Iron Ore
Steel News Headlines
May 4 – PlattsFundamentals strongly support iron ore prices
May 4 – SEAISITurkish rebar list prices jump by $40/mt
April 30 - MEPSUS steel coil price regain upward trajectory
April 29 – ReutersExport rebate cut rallies steel futures
April 29 – BloombergSteel records broken in emission crackdown
April 28 – PlattsChina removes VAT rebate on steel exports
April 28 – SEAISIScrap imports to China rise in March
April 28 – PlattsIndia´s Q1 steel exports rise 26%
April 27 – BlueScopeBlueScope Steel increases earnings guidance
April 27 – PlattsUS steel prices higher for longer
April 27 – SEAISITaiwan´s scrap imports rise on lower prices
April 27 – PlattsSteel rally sweeps iron ore to all-time high
April 26 – ReutersPosco posts decade-high quarterly profit
April 26 – ReutersBaosteel´s largest profit increase in two years
April 22 – WSAMarch 2021 crude steel production
For more steel news headlines, click here
Prices are displayed in USD per tonne. See Key to Prices for full product description.
* Source: World Steel Association
1. China 90.2
2. India 10.0
3. Japan 7.9
4. United States 6.9
5. Russia 6.7
6. South Korea 6.0
7. Turkey 3.4
8. Germany 3.3
9. Brazil 3.0
10. Iran 2.6
Rank Country Million Metric Tonnes
Top 10 Steel Producing
Countries in January 2021*
Reinforcing Steels / David Roberts / [email protected]
Structural Steel / PC Strand / Mark Horwitz / [email protected]
Special Steels / Tube and Pipe / Matt Gilpin / [email protected]
Stainless Steel / Howard Seligsohn / [email protected]
Flat Products / Stuart Robertson / [email protected]
Rural Products / Liubov Morozova-Sogrine / [email protected]
Wire and Aluminium / Steve Wade / [email protected]
May 3 Apr 1 Mar 1 Feb 1 Jan 1 Dec 1
Copper 9949 8768 9198 7827 7741 7644
Aluminium 2445 2212 2154 1985 1978 2045
Nickel 17477 16001 18655 17807 16540 16102
Zinc 2904 2765 2788 2548 2723 2768
Vanadium 36.50 35.20 33.50 30.50 30.00 27.00
Non-Ferrous Metals PricesPrices are displayed in USD per tonne, except Vanadium in USD/kg. See Key to Prices.
372
423
471
460474
380
475
397
460
442
466
321
447
368
427
401
420
290
340
390
440
490
Dec 1st Jan 1st Feb 1st Mar 1st Apr 1st May 4th
Steel Scrap Turkey East Asia Import CFR
Taiwan Containerized CFR
2667 2638
2874
3072
2830
2982
19662036
2194
2389
2156
2301
1800
2000
2200
2400
2600
2800
3000
3200
Dec 1st Jan 1st Feb 1st Mar 1st Apr 1st May 3rd
Stainless Steel Feedstock Index*- EAF (AUD)
Stainless Steel Feedstock Index*- EAF (USD)
* The Stainless Steel Feedstock Index is the cost of iron ore, chromium and nickel in one tonne of stainless steel created through the EAF process. For a full explanation of ASN´s unique Stainless Steel Feedstock Index, click here.
Prices are displayed in USD per tonne. See Key to Prices.
Stainless Steel Feedstock IndexPrices are in the currency indicated. See Key to Prices.
Scrap Metal Prices - HMS 1/2 80 : 20
Ariston Wire Contacts
Wire and Reinforcing Accessories:
Fran Liebovitz / [email protected]
Galvanised Mesh and Fencing Products:
Ian Jones / [email protected]
Telephone: (02) 93874188
Website: www.aristonwire.com.au
Ferro Alloy Prices
FeCrHC basis 60% Cr 6-8% C ddp NWE
FeMnHC Mn 78% ddp Europe Works
FeSi75% Si fob China
FeMo65-70% Mo dp Rotterdam
22,75023,85024,900
28,925
27,05028,225
Dec 1st Jan 1stFeb 1st Mar 1stApr 1st May 3rd
1973 19732205
2590 2557 2579
Dec 1st Jan 1stFeb 1st Mar 1stApr 1st May 3rd
12251360
1460 1450 1465 1485
Dec 1st Jan 1stFeb 1st Mar 1stApr 1st May 3rd
1062 1116
1345 1320 1287
1560
Dec 1st Jan 1stFeb 1st Mar 1stApr 1st May 3rd
Prices are displayed in USD per tonne.
Top Steel-Producing Companies*(Figures quoted are millions of metric tonnes)
Rank Company HQ 2019
1. ArcelorMittal Luxembourg 97.312. China Baowu China 95.473. Nippon Steel Japan 51.684. HBIS Group China 46.565. POSCO South Korea 43.126. Shagang Group China 41.107. Ansteel Group China 39.208. Jianlong Group China 31.199. Tata Steel India 30.1510. Shougang Group China 29.34
* Source: World Steel Association
0.76 0.77 0.75 0.77
0.63 0.64 0.64 0.64
1.06 1.06 1.08 1.07
0.4
0.6
0.8
1
1.2
1.4
Feb 1st Mar 1st Apr 1st May 3rd
FX Rates – May 3rd, 2021
USD/AUD Euro/AUD NZD/AUD
0.8
1
0.8
0.8
0.8
0.6
3
0.6
5
0.6
4
0.6
5
1.0
8
1.0
5
1.1
1.1
0.4
0.6
0.8
1
1.2
1.4
NAB ANZ W/PAC CBA
Future FX Rates
USD/AUD Euro/AUD NZD/AUD
Movement since April 1st, 2021:
May 3 Apr 1 Mar 1 Feb 1 Jan 1 Dec 1
BHP Group 47.03 45.65 50.09 44.12 42.43 38.56
Bisalloy Steel 1.10 1.05 1.05 1.15 1.40 1.36
BlueScope Steel 21.46 20.02 17.25 16.62 17.48 17.20
Fletcher Building 6.83 6.45 6.14 5.83 5.44 5.48
Rio Tinto 120.09 112.00 127.70 111.27 113.83 102.95
Sims Ltd 15.89 15.08 13.60 12.37 13.45 11.19
Company Share Prices - (ASX end of day quote in AUD) Currency Changes
AUD is up 2.7%
against the USD
AUD is unchanged
against the Euro
…..will reach the 2019 level again in 2022. Additionally, the recovery in the
global automotive industry is expected to be very strong in the United States
where production levels this year will exceed the 2019 level, whereas the world
automotive industry will reach that mark in 2022.
Australia was not detailed in the WSA outlook, however a slew of economic
indicators bode well for steel usage. No such degree of optimism, however, from
the citizens of Whyalla – Sanjeev Gupta´s spiritual home – who remain anxious
observers of the gathering GFG / Greensill crisis. Credit Suisse is seeking the
wind-up of Whyalla´s steelworks to recoup losses on invoices, which Greensill
packaged into bonds purchased by the Swiss bank. A hearing in the NSW
Supreme Court is scheduled for May 6. Meanwhile, prices in Australia continue
to firm as demand remains strong and shortages and delays plague the
domestic supply situation. Whilst scrap has firmed slightly, most import sources
of supply are taking advantage of the seller´s market mind-set to move prices up
beyond their cost recovery. In a market like this one, the domestic players would
typically be taking advantage to widen their spreads and put extra on the bottom
line. However, their formulae based pricing will mean they either retract from
pricing commitments made, or leave plenty of margin on the table. Eventually,
it´s likely the import option may become the only way to get enough steel. But
given the shipping delays and difficulty in committing to such high pricing more
than three to four months in advance, it is likely the market will remain tight and
short of steel for the next quarter at least. (Return to page 1)
Market Summary - Continued
Source: X-rates.com Banks´ estimate of the value of the AUD at the end of Q3 2021.
AustralianSteel.com
Extensive coverage of steel prices, plus details of services and suppliers
in the Australasian steel industry.
Visit the website: here
Steel Industry Services
Baltic Dry Index Fuel Prices Associations
Industry Insider - Comment
By Simon Pepper*Director of Customs and Logistics, SILA Global
The Baltic Dry Index (BDI) is
issued daily by the London-
based Baltic Exchange. It is a
composite of the Capesize,
Panamax and Supramax
Timecharter Averages. The BDI
is a proxy for dry bulk shipping
stocks and a general bellwether
to shipping markets. Here are
two websites with links to it:
Trading Economics
The Business Times
Variations in petroleum and
diesel prices can critically
impact the final transport costs
of moving steel within Australia.
The Australian Institute of
Petroleum (AIP) is the peak
representative body of
Australia´s downstream
petroleum industry. It publishes
a weekly prices report for
petroleum and diesel.
AIP Petroleum & Diesel prices
The steel, metals and related
industry sectors in Australia
and New Zealand are well
served by numerous peak
bodies and associations. The
website AustralianSteel.com
contains a list of the most
prominent associations which
serve the industry. Click below.
AustralianSteel.com Industry
Associations list
Many services and associations exist to assist people and companiesworking in the steel and metals industries. Here is a selection:
Australia’s anti-dumping system can be a daunting subject
to understand and often difficult to navigate. The Anti-
Dumping Commission (ADC) manages Australia´s anti-
dumping and countervailing system, which states its main
aim being to: “.…investigate claims that dumped and
subsidised imports have injured Australian industry.”
In broad terms, anti-dumping claims can be made by
Australian businesses who are capable of producing a
commodity subject to an investigation. By definition,
“Dumping generally occurs when a company exports a
product into Australia at a price that is lower than the price
charged in the country of manufacture.” This could occur in
different circumstances or for different reasons. The
process of investigation into claims can take quite some
time, depending on the commodity involved, and the
suppliers and importers of the investigated product.
The ADC has a Dumping Commodity Register which lists
the goods currently subject to “measures”. At present, the
list contains 27 commodities, more than half of which are
either steel feed materials, or semi-manufactured or fully
finished steel articles. This is quite a wide net and it is
very easy to be caught up in it.
The Register indicates the commodity, the country of
export, their associated tariff classifications, and
statistical codes. Ensuring that origin information is
available and that your goods are classified correctly is
essential to understanding if dumping may apply. From
this foundation and understanding the goods covered by
the case becomes the next essential step because, even
though your goods may have the same origin and
classification as those listed, they may be excluded from
the case based on the specifications of the material.
There are also certain exporters which are listed as
exempt or have tariff concessions that, if applicable to
your goods, can make the shipment excluded from any
dumping being applicable. Importers are encouraged to
self-assess as to….(click here to continue reading)
• In the US, Nucor, Gerdau, CMC and Steel Dynamics have announced
an immediate $40/st increase in their rebar prices, blaming tight
domestic supply and a lack of imported material. (Platts)
• Time is running out for Sanjeev Gupta´s GFG Alliance as applications
in the UK to compel the liquidation of three Liberty Steel Group
companies are due to be heard by a judge in early May. (BBC)
• Belgian authorities have melted down more than 22,000 guns and
turned them down into 60 tonnes of recycled steel. It is the third time
Belgian security forces have cooperated with steel giant ArcelorMittal to
collect and destroy firearms. (Reuters)
• Steel exports from India surged 26% in the first quarter of 2021 to total
around 2.47 million metric tonnes. (Scrap Monster)
Offcuts……Steel Around The World Key to Prices
Prices and figures quoted should be taken as indicative numbers only. While all
care has been taken in compiling this newsletter, readers acting upon the
information herein do so entirely at their own risk. The publisher accepts no
responsibility for any consequences arising from commercial decisions made by
readers. Most of the numeric information in this newsletter is freely available at the
sources quoted. Readers are urged to check figures against the original source. All
comments expressed are the opinion of the publisher, unless otherwise stated.
Copyright is reserved for the full contents of the newsletter.
Australian Steel News particularly acknowledges two of its principal sources of
information: S&P Global Platts (Platts) and South East Asia Iron and Steel Institute
(SEAISI).
Australian Steel News (ASN) is a completely independent, monthly newsletter
which is owned and published by Caletablanca Media. ASN and Caletablanca
Media are not in any way connected to any steel industry association or
company or any other entity in Australia. To suggest information you would like
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* Disclaimer
1. Wire Rod – Shanghai Futures
Exchange (SHFE). Standard
bundle size Chinese wire rod
grade HPB235 in diameters 6.5
and 8.0mm. VIEW
2. Steel Rebar China – SHFE
closing price on day converted
at 7.0 Yuan/USD. VIEW
3. Steel Rebar Southeast Asia
CFR – S&P Global Platts
(Platts) daily rebar.
4. Steel Rebar Turkey – London
Metal Exchange (LME) one
month exports FOB Turkish
port. VIEW
5. Steel Scrap Turkey – LME
closing contract price CFR
Turkish port. VIEW
6. HRC North America – LME
closing contract price ex works
Indiana. Short ton price
converted by 110% to per
tonne. VIEW
7. HDG Shanghai – Platts China
FOB export monthly.
8. HRC Southeast Asia – Platts
daily HRC CFR SS400.
9. HRC China – LME closing
contract price FOB China.
VIEW
10. Slab Southeast Asia – Platts
monthly CFR Southeast Asia.
11. Coking Coal – Platts Australian
premium low volume HCC.
12. Iron Ore – NAB sourced
Bloomberg indicative CFR for
62 Fe shipping to Qingdao.
VIEW
13. Non-Ferrous Metals – LME
official closing day price for:
copper, aluminium, nickel and
zinc. VIEW
14. Vanadium – Ferro vanadium
80% China price in USD/kilo
from Vanadiumprice website.
VIEW
15. Taiwan Containerized Scrap –
Platts weekly Taiwan CFR.
16. East Asia Import Scrap – Platts
weekly East Asia Import CFR.
17. Ferro Alloy Prices – Argus
Metals International mid-point
price of range on date
indicated.
18. FX Rates – Sourced from X-
rates.com. VIEW
19. Company Share Prices –
Australian Stock Exchange end
of day quote in AUD. VIEW