GLOBAL UNREST CONTINUES TO IMPACT THE STEEL MARKET
The conflict in Russia and Ukraine is continuing to impact the global steel market. U.S. imported pig iron prices are up 14.4% week over week as mills try to secure Brazilian pig iron. The U.K. has introduced a 35% tariff on iron and steel from Russia and Belarus after denying the Most Favored Nation tariff for hundreds of their exports. Steel production in Russia and Ukraine fell in February to its lowest daily rate since September. And spot HRC prices in Northern Europe have seen sharp increases due to lower supply from Russia and Ukraine and rising raw material costs.
Zinc pricing held relatively steady this week after the sharp increases the previous two weeks, coming in above $1.80/lb. this week.
- Skyrocketing energy pricing is affecting smelters around the globe, particularly in Europe, which has helped to push the price higher.
Spot iron ore pricing rebounded this week, climbing to $143.50/mt.
- Spot iron ore pricing is down 5.9% w/w but still below prior year levels.
Met coal pricing saw sizeable price declines this week; Pacific basin met coal pricing slipped after hitting a fresh all-time high last week.
- Met coal pricing declined to $598/mt this week, down 10.7% from last week but up 33.9% from this time last month.
U.S. imported pig iron prices increased 14.4% w/w to $1,030/mt as of Friday (+59.9% m/m, +57.9% y/y, record high), as mills are trying to secure Brazilian pig iron amid continued fallout from Russia and Ukraine.
Domestic raw steel production increased slightly last week after a slight decline previously.
- U.S. steelmakers produced 1.742 million tons at an 80.2% utilization rate.
- Year-to-date production is 0.3% above the total from the same period last year.
The U.K. government has imposed a 35% import tariff on iron and steel from Russia and Belarus as part of denying the two countries Most Favored Nation tariff for hundreds of their exports.
- Copper, aluminum, silver, lead, and iron ore are also on the list of goods to be tariffed.
Total global steel production inched higher, on a daily basis, in February.
- February global steel production averaged 5.096 million mt/day, this is up 0.8% from January.
- While production was up slightly from January, it was down 5.7% from a 5.406 million mt/day rate in February 2021.
- While Chinese production was flat from January, production throughout the rest of the world was up.
- Production in the Ukraine and Russian region declined 6.8% in February and was at its lowest daily rate since September.
February total carbon steel imports totaled 1.780 million tons, down 25.2% from January, but was still up 67.4% from February 2021.
- Carbon flat rolled imports were down sharply in February as well, sliding to 558,131 tons.
- This is down 35.8% from January but still up 23.1% from 453,564 tons in February 2021.
- All three flat rolled products saw a sharp month-over-month decline, with hot rolled imports sliding the most, 45.4%.
- Both cold rolled and coated imports declined as well, sliding 27.5% and 32.6%, respectively.
- Year-to-date carbon flat rolled imports are still up 69.4% compared to the first two months of 2021.
New home sales slipped for the second consecutive month in February, on a seasonally adjusted basis.
- February new home sales came in at a 772,000-unit rate, down 2.0% from January and down 6.2% from an 823,000-unit rate in February 2021.
- The amount of new homes for sale increased again, now up for the second consecutive month.
- New home inventory came in at 401,000 units, the highest level since August 2008.
- Year-to-date actual new home sales are down 12.2% compared to the first two months of 2021 but up 5.7% compared to January and February 2020.
According to Platts, HRC pricing around the globe continues to see an uptick after the recent disruption to supply from Russia and Ukraine.
- Spot HRC prices in Northern Europe have increased sharply on the back of lower Russian and Ukrainian supply and a sharp increase in raw material costs.
- Current HRC pricing for Northern Europe is $71.35/cwt.
- Asian HRC pricing increased as well this week, climbing to $39.00/cwt.
This material, information and analyses (the “Content”) may include certain statements, estimates and projections prepared with respect to, among other things, historical data and anticipated performance. Content may reflect various assumptions by Majestic Steel USA, Inc. concerning anticipated results that are inherently subject to significant economic, competitive and other uncertainties and contingencies and have been included for illustrative purposes. Content is provided AS-IS.