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October import licenses rose 3.1% after posting continuous declines since April as a sharp pick-up in imports of line pipe (+67.6%), rails (+53.8%), beams (+34.4%) and …more
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Less than three weeks after US Steel led with a $40/ton sheet hike, AK Steel announced a second sheet price increase of $50/ton effective immediately today, bringing the total to $90/ton.
SBB’s domestic HRC price assessment had remained stable the past two weeks after jumping $25/ton (or 4.3%) less than a week after US Steel’s initial hike, and we believe this increase is an attempt to get the market to fully absorb the first $40/ton hike.
Scrap Will Help. Strengthening scrap will likely support the increase, as there are increasing reports of scrap purchases up as much as $45-55/ton. We believe other sheet mills are likely to follow, although we suspect mini-mills will wait for Chicago scrap prices to settle before announcing increases of their own.
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A.M. Castle (CAS) reported adjusted 3Q earnings of $0.10/share, below the Street’s $0.13/share, but “in line with the company’s expectations,” according to …more
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The spot reference price for 62% Fe iron ore cfr North China rose 0.4% to $120.10 for the week ending November 2, 2012, after increasing 3.7% the week before, and is now 34.9% higher than the recent low of $89.00 on 9/7/2012.
The spot price for iron ore averaged $141.84 in 1Q, $139.35 in 2Q, and $112.12 in 3Q; this compares to an average of $167.59 for full-year 2011.
The post-recession low was $59.10 on March 27, 2009, while the high was $190.19 on February 17, 2011.
Source: The Steel Index
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Vale generated adjusted 3Q EBITDA of $4.28B, well short of the Street’s $4.76B and 2Q’s $5.5B. Management attributed the lower EBITDA sequentially mainly to declining …more
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At CRU’s 6th annual North American Steel Conference held in Chicago last week, CRU Managing Consultant Robert Edwards presented the group’s outlook for steel demand and pricing going forward.
According to Mr. Edwards, CRU’s expectations for GDP growth are 2.3% in 2013 and 2.9% in 2014, assuming the fiscal cliff is averted. CRU’s expectation for steel demand through 1H13 is for a seasonal if not real recovery in demand along with a corresponding rise in prices from today through the end of 1H13.
Looking at specific markets, CRU anticipates automotive production in the United States to hit 14.9 million vehicles this year – gradually moving up to 17.2 million in 2017. Residential and non-residential construction activity is also expected to start showing growth totaling about 7% in the next 5 years.
Mr. Edwards did offer some caution regarding prices in the longer term, saying that HRC prices will likely peak in 2Q13 at $665/t and begin to drift downwards over the next 5 years due to slipping raw materials prices – after which CRU sees HRC below $600 on a sustained basis.
At CRU’s 6th annual North American Steel Conference held in Chicago last week, panelists debated the long-time question of materials use in coming generations of automobiles.
On the side of Advanced High Strength Steels (AHSS), Dr. PK Rastogi – Global Automotive Marketing Manager at ArcelorMittal said that it’s possible to build a car that can attain 54.5 mpg using AHHS while shifting to aluminum aluminum achieves only marginal improvement on this figure at higher cost.
Following this up was Curt Horvath – Technical Fellow of Materials and Corrosion Engineering at GM who said that he doesn’t see the auto industry moving away from steel due to the investments it has made in steel processing.
Ron Krupitzer – VP Automotive Applications at the American Iron & Steel Institute pointed out that when it comes to the total life-cycle carbon footprint of a vehicle made from AHSS vs. one made from aluminum, magnesium and carbon fiber – the vehicle made from AHSS had the smaller carbon footprint.
Umesh Gandhi – a scientist at the Toyota Research Institute of North America – said that much of the weight-savings AHSS can yield has been achieved already and that the next lowest hanging fruit is going to come in the form of glass fiber materials.
Alcoa’s Director of Automotive Sheet, Randall Scheps argued that aluminum is now 343 pounds of weight in the average car and that compared to engine modifications fuel efficiency gains are easier to achieve by switching to aluminum. He went on to say that the product they offer works with existing auto presses and that in 8 years he foresees 10 times the demand for rolled aluminum products.
Our Conclusion? In the 1970s at the time of the first gas crisis in the United States, the aluminum industry first stepped up to offer CAFE-compliant auto bodies to Detroit. In the 40+ years since that time, aluminum’s inroads have been meager as steel has stayed ahead of the curve with lightweighting, improved formability, longer-lifespan and dramatically improved recycling. We suspect that Detroit will stick with the tried-and-true.
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After declining nearly 20% over the past two months, we believe that November scrap buys will be done at higher levels in the coming days, with increases as large as $30…more
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Steel Market Production Cuts – Russian steelmaker Severstal North America has been forced to halt crude production at the Dearborn, MI facility due to an explosion in a cold air pipe, but the finishing end will continue to operate.
Steel Market Production Increases – U.S. Steel announced that a 500,000 tpy continuous annealing line will be commissioned at the PRO-TEC joint venture in early 2013. The line will produce “high-strength, lightweight steels for the auto industry.”
Steel Market Production Cuts – ArcelorMittal South Africa announced that it has idled the EAFs at the Vanderbijlpark plant due to government claims it has violated emission regulations.
Steel Market Production Increases – Brazilian steelmaker Gerdau will begin operations at a 770,000 tpy hot-strip mill in December or January next year and is considering increasing crude steel and longs capacity by 280,000 tpy and 425,000 tpy at the Colina facility in Chile.
Steel Market Production Increases – Brazilian steel producer Usiminas has commissioned a 2.3 mtpy hot strip mill and a 500,000 tpy finishing line at the Cubatao facility.
Steel Market Production Cuts – Italian steelmaker Beltrame announced that it will permanently shutter two merchant bar rolling mills in Luxembourg and Belgium with 450,000 tpy of combined capacity.
Steel Market Production Cuts – Chinese steelmaker Shagang is planning a two-month maintenance outage that will result in 400,000 tonnes of lost output.
Sources: Steel Business Briefing, American Metal Market, SteelOrbis
HRC and HDG lead times for the week ending October 28 remained at last week’s levels of 3.3 and 5.4 weeks respectively
CRC lead times posted the lone increase rising to 4.9 from 4.8 in the week prior.
Sources: The Steel Index, Steel Business Briefing
HRC = Hot Rolled Coil CRC = Cold Rolled Coil HDG = Hot Dipped Galvanized
