STEEL/IRON ORE

摘要

Recent months witnessed sharp declines in steel prices across the world. According to World Steel Dynamics' (WSD) SteelBenchmarker, the world export price for hot rolled band (HRB) fell by $88/t in the three months to 13 November to a three-year low of $418/t. HRB prices have declined in China, Western Europe and the US.The Chinese HRB price dropped to the lowest level since June 2017 on 30 October at $431/t, more than $80/t below the corresponding 2018 level (and has since edged only slightly higher - see chart). China's domestic rebar prices are similarly down on last year. Chinese steel prices have come under pressure from a combination of 1) softer domestic demand; the country's steel sector Purchasing Managers' Index (PMI) plunged to the lowest level since 2015 in October at 41.3 as the sector contracted for a fifth consecutive month (a value below 50 indicates contraction), 2) overcapacity in the sector; according to WSD China's wide hot strip mills are running at less than 50% of gross capacity, 3) the ongoing US-China trade war; which has damaged global economic growth and reduced exports opportunities for steel products, and 4) a fall in steelmaking raw materials prices; at time of writing, the delivered price of 62% Fe iron ore in China is down by more than $10/t month-on-month, while Australian FOB coking coal prices are at their second lowest level since August 2016.