Last month, MetalMiner issued the following statement: “MetalMiner believes that the impact on Grain Oriented Electric’s steel purchasing organization will not fully reflect the broader impact of tariffs on commonly used steel forms, alloys and grades.”
We don’t always get it right, but in fact the price of GOES M3 has fallen in the last month compared to the overall price increase in all or almost all other carbon flat rolled product categories.
Meanwhile, while MetalMiner is aware of one purchasing organization that has filed an exclusion request through the recently announced exclusion process, no company has applied (at least as of April 11).This will change as GOES imports continue to come.
A quick search shows that the 301 investigation also includes grain oriented electrical steels with HTS codes: 72261110, 72261190, 72261910 and 72261990 – basically “alloyed silicon electrical steels of various widths (grain oriented)”.
However, the Section 301 investigation does not include transformer components (8504.90.9546) or wound cores (8504.90.9542), both of which could enter the United States based on current market treatment.
MetalMiner will update readers when/if President Trump makes an announcement regarding the Section 301 investigation.
US grain oriented electrical steel (GOES) coil prices fell to $2,595/t this month from $2,637/t.The MMI fell 3 points to 188.
GOES MMI® collects and measures 1 global grain oriented electrical steel price point to provide a unique perspective on 30-day price trends.For more information on the GOES MMI®, how it is calculated, or how your company uses the index, drop us a line at info (at) agmetalminer (dot) com.
The stainless MMI (Monthly Metals Index) edged up 1 point in April.The current reading is 76 points.
A rise in stainless steel surcharges boosted the index despite a slight drop in LME nickel prices this month.Other related metals increased in stainless steel baskets.
LME nickel prices fell along with other base metals in March.However, the decline does not appear to be as dramatic as aluminum or copper.
Nickel prices on the LME remain elevated, a far cry from the 2017 lows seen in May or June, when MetalMiner advised buying groups to buy some forward volume.The price was around $8,800/t at the time, compared to the current price level of $13,200/t.
Following the recovery of stainless steel kinetic energy, domestic stainless steel surcharges have increased this month.
316/316L coil NAS surcharge up to $0.96/lb.Therefore, buying organizations may want to look at surcharges to identify opportunities to reduce price risk through forward purchases or hedging.
The rate of increase in stainless steel surcharges appears to have slowed this month.However, from 2017, the surcharge has increased.316/316L coil NAS surcharges approach $0.96/lb.
With steel and nickel still in a bull market, buying groups may want to keep an eye on the market for opportunities to buy the dip.
To learn how to adapt your buying strategy each month to your specific needs, try our monthly outlook for free today.
Chinese 304 stainless coil prices rose 1.48%, while Chinese 316 stainless coil prices fell 0.67%.Chinese ferrochrome prices fell 5.52% this month to $1,998/t.Nickel prices also edged down 1.77% to $13,300/t.
The raw steel MMI (monthly metals index) fell 4 points this month to 88.Despite the decline in raw steel MMI, the domestic steel price momentum has been declining throughout March.The prices of major flat steel products hit a seven-year high.
Domestic steel prices have picked up pace, with domestic HRC prices rising from $600-$650/st to around $850 in the past three months.
The rise in steel prices is the result of many factors.First, the long-term trend that started in 2016 led to higher steel prices.Second, the delayed steel industry cyclicality (seasonality) steepens the steel price slope.
Historically, prices have typically risen in the fourth quarter as many companies renegotiate their annual agreements during next year’s budget season.However, this year’s rise in steel prices did not materialize until later.Prices appear to be awaiting the outcome of Section 232 (and corresponding tariffs), which is supporting domestic steel prices.
However, domestic steel prices appear to be closer to the end of the latest price hike.Based on historical steel price cycles, lower Chinese steel prices and lower raw material prices, domestic steel prices are likely to decline in the coming months.
Chinese steel prices and U.S. steel prices are usually traded together.However, short-term trends sometimes diverge a bit.
Short-term trends may be caused by local uncertainty or sudden disruptions in local supply.But these short-term trends tend to correct and return to their historical patterns.
Comparing Chinese and US HRC prices, the price differences observed this month are not surprising.
HRC prices in the US have skyrocketed, while Chinese HRC prices have continued to fall.Chinese HRC prices did rise faster in 2017 (starting June 2017), helped by production cuts in the Chinese steel industry.The spread between Chinese and domestic steel prices declined in the third quarter of 2017 as U.S. domestic steel prices traded sideways.The recent decline in Chinese steel prices may put downward pressure on domestic steel prices.
China’s steel output cuts continue.The city of Handan ordered mills to cut steel production by about 25% to continue implementing pollution control measures.Those cuts will be extended from April to mid-November.The coking coal industry will also cut production by about 25% during this period.The cuts start on April 1.
According to the official gazette of the Mexican government, the Mexican Ministry of Economy has officially imposed anti-dumping duties on carbon steel pipes imported from South Korea, Spain, India and Ukraine.
Raw material dynamics appear to have slowed down after raw material price hikes before the end of 2017.
Iron ore prices fell sharply in March.Iron ore prices edged up earlier this month.However, the sharp drop in prices last month may not be able to support the current high domestic steel prices.
Coal prices also fell in March.Coal prices appear to have edged up again this month, even though current prices are far from the January 2018 high of $110/t.
With steel price action showing strong upward momentum this month, buying groups may want to understand price action to decide when to commit to mid- to long-term purchases.Purchasing organizations that want more clarity on when to buy and how much steel products to buy may want to try our monthly metals purchasing outlook for free today.
US Midwest HRC 3-month futures fell 3.65% this month to $817/t.Chinese steel billet prices fell 10.50%, while Chinese slab prices fell only 0.5% to US$659/t.US shredded scrap prices closed at $361/st this month, up 3.14% from the previous month.
The aluminium MMI (monthly metals index) fell 3 points in April.Weaker aluminium prices on the LME led to a price pullback.The current aluminum MMI index is 94 points, 3% lower than in March.
LME aluminium price momentum slowed again this month.LME aluminium prices are still in a two-month downtrend.
While some might want to declare a bearish aluminum market, prices were still above $1,975 when MetalMiner advised buying organizations to buy ahead.The price may fall back to this level.However, if the price breaks below the blue-dotted line, aluminum prices could turn to bearish territory.
Spot aluminium prices on the Shanghai Futures Exchange also fell this month.The decline appears to have been less dramatic than LME prices.However, the spot aluminium price on the Shanghai Futures Exchange started to fall from October 2017.
Aluminum inventories on the Shanghai Futures Exchange (SHFE) fell in March for the first time in more than nine months.Inventory drawdowns have sometimes signaled a drop in aluminum inventories in China, the world’s largest producer and consumer of aluminum.Inventories on the Shanghai Futures Exchange fell by 154 tonnes in March, according to exchange data released in early April.However, aluminium inventories on the Shanghai Futures Exchange remained at 970,233 tonnes.
Meanwhile, aluminum premiums in the U.S. Midwest fell for the first time since November 2017.The drop of $0.01 a pound in early April came after a sharp rise in premiums.Although premiums are lower this month, the upward pace is likely to continue for some time.
A retracement in the LME aluminium price could present a good buying opportunity for buying groups as prices are likely to rise again.
However, with prices currently lower, buying groups may want to wait until the market shows clearer direction.Therefore, adjusting the “correct” buying strategy is critical to reducing risk.
Given the continued uncertainty around aluminium and aluminium products, purchasing organisations may now wish to try our monthly metals purchasing outlook for free.
Aluminum prices on the LME fell 5.8% this month to end March at $2,014/t.Meanwhile, South Korean commercial 1050 sheet rose 1.97%.China’s aluminum raw spot price fell 1.61%, while China’s aluminum rod fell 3.12%.
Chinese billet prices were flat this month at $2,259/t.Indian primary spot prices fell 6.51% to $2.01/kg.
Last month, in the title of our monthly update article on the world’s precious MMI, we mentioned the fact that platinum and palladium prices have fallen.Then we asked, “Will it continue?”
As U.S. platinum and palladium prices fell, our Global Precious Metals Monthly Index (MMI), which tracks a global basket of precious metals, fell again in April – down 1.1% and entering a two-month downtrend.
(Last month, we originally reported that the index had been in a two-month uptrend before falling in March. Correction: It was actually in a four-month uptrend at the time.)
Both the stock market and commodity markets have seen some turmoil recently, with President Trump imposing tariffs on steel, aluminum and possibly an additional 1,300 Chinese imports in the middle of last month, and China retaliating with tariffs on some items.Nonmetallic U.S. merchandise exports.
It is no exaggeration to say that a chain reaction is taking place in the precious metals market.