Sluggish global steel demand pressures iron ore, met coal prices

Global steel mill margins have shrunk in 2019, in turn pushing down iron ore and coke consumption and prices for coking coal. In 2018 Platts benchmark US hot rolled coil (HRC) spot prices exceeded $1000/mt delivered Midwest for the first time since 2008, and the sustained run in steel pricing and demand since 2016 delivered high profits for steel producers.   High global steel prices last year have quickly been forgotten, as offtake from steel buyers in the US and Europe reduced into 2019, and high iron ore and coke costs squeezed margins. Steel markets are still currently testing their lows, after high profits last year at steel producers following a sustained run in steel pricing and demand since 2016. A steel price rebound off current lows has failed to solidify in Europe since northern hemisphere markets slowed into summer. Global trade tariffs in steel and raw materials, in markets such as the US, EU, Turkey and India, may have added more volatility into the downturn. This is further impacting on the well-known cyclicality in the steel sector. Steel production declines are gathering pace in the Atlantic Basin, and reducing consumption of coking coal. Price negotiations in North America for… continue reading

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