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Summary
Contact TSI:
Marina Maliushkina
Tel: +44 20 7176 7667
europe@thesteelindex.com
US HR coil price rises accelerated in April, TSIs daily US Midwest HR coil benchmark raced
past the US$500/short ton mark to finish the month at US$520/s. ton, a jump of US$76/s. ton
from the beginning of Q2.
European steel prices continued to rise in April, as buyers turned to domestic material in the
absence of competitive import offers. European producers were able to push through several
rounds of price hikes. Both TSIs North and South European HRC indices gained over 40/
tonne during the month.
Jasmine Kurjakovic
Tel: +1 412 431 0584
america@thesteelindex.com
TSIs ASEAN HRC index surged during the first three weeks of April, when it reached US$479/tonne
CFR ASEAN port, its highest level since December 2014. But as the Chinese domestic market started
to weaken, export prices made a U-turn, and the index ended the month at US$465/t.
TSI Weekly Steel Hot Rolled Coil Reference Prices (change week-on-week)
Benchmark Indices
April 4-10
April 11-17
April 18-24
Apr 25-May 1
359
+4.7%
364
+1.4%
367
+0.8%
381
+3.8%
350
+4.5%
353
+0.9%
361
+2.3%
375
+3.9%
393
+1.6%
431
+9.7%
467
+8.4%
468
+0.2%
449
+1.4%
476
+6.0%
493
+3.6%
520
+5.5%
457
+3.9%
480
+5.0%
488
+1.7%
514
+5.3%
373
+0.5%
421
+12.9%
440
+4.5%
453
+3.0%
35,850
+1.6%
36,137
+0.8%
36,273
+0.4%
36,323
+0.1%
January
February
March
April
319.35
+0.8%
322.67
+1.0%
334.67
+3.7%
366.86
+9.6%
286.40
+2.0%
288.05
+0.6%
310.14
+7.7%
359.05
+15.8%
290.90
+6.0%
296.95
+2.1%
362.45
+22.1%
437.33
+20.7%
391.00
+5.7%
400.10
+2.3%
413.71
+3.4%
482.57
+16.6%
313.00
-1.6%
325.40
+4.0%
420.50
+29.2%
484.75
+15.3%
274.25
+4.6%
285.40
+4.1%
345.50
+21.1%
421.75
+22.1%
29,459.75
-2.6%
29,170.00
-1.0%
33,858.25
+16.1%
36,145.75
+6.8%
*Average of TSI's daily prices rounded to nearest whole number, **SAE grade
United States
70
65
60
US crude steel capacity utilisation and output were both flat month-onmonth in April, averaging 72% and 1.523 million metric tonnes respectively, over the five-week month, based on weekly estimates from the
American Iron & Steel Institute (AISI).
Continued on next page
55
75
Perhaps most tellingly, Asian steel prices grew even more over the
same periodASEAN HRC imports leapt 46% between March-April
(see page 3). The general increase in global flat steel prices will have
supported rises in the US Midwest.
80
85
With the onset of Spring and a warmer climate beckoning for the US
Midwest, steel markets in the region also showed signs of heating up
as HR coil prices surged US$76/short ton FOB Mill across April to
close at US$520/s. ton. Last months rise followed on from a US$44/s.
ton increase over March, leading to a 30% jump in spot prices in just
over two months.
Source: AISI
April 2016
USA continued...
0.6
0.4
0.2
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
0.0
Aug-15
ISM noted that whilst new orders and production grew at a slower pace,
employment improved, though it remains in contraction.
0.8
Jul-15
The Institute for Supply Management (ISM) published its April PMI for
manufacturing activity, showing a one percent slowdown in the rate of
growth to 50.8.
1.0
Jun-15
1.2
May-15
Preliminary Steel Import Monitor & Analysis (SIMA) data released by the
US Department of Commerce showed flat steel imports were largely
unchanged month-on-month in April, at just over 900kt.
Millions
India
N. Europe
S. Europe
70
50
30
10
-10
-30
Source: TSI
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep -15
Nov -15
Jan -16
Imports
Exports
Source: Eurofer
Mar-16
Jan-16
Nov-15
Jul-15
Sep-15
May-15
Jan-15
Mar-15
Sep-14
Nov-14
Jul-14
Mar-14
May-14
Jan-14
Nov-13
Jul-13
Sep-13
May-13
Jan-13
TSIs weekly HR coil index edged upwards to Rs36,474/tonne, delivered, duty paid, Mumbai (+1.7%, 4-week change).
1.1
Mar-13
After the surge in domestic HR coil prices in March, April activity was a
little more subdued, with spot prices in the domestic Mumbai market
marginally higher month-on-month.
Source: BDS
April 2016
Asia
400
40.0
300
Apr-16
Mar-16
Jan-16
Feb-16
Nov-15
Dec-15
Sep-15
Oct-15
Jul-15
Aug-15
Jun-15
Apr-15
May-15
Mar-15
Jan-15
Feb-15
Nov-14
Dec-14
Sep-14
Oct-14
Jul-14
Aug-14
35.0
Jun-14
250
9
8
7
6
3
2
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
Mar-15
45.0
350
Jun-15
50.0
450
May-15
55.0
500
Apr-15
ASEAN buyers were initially reluctant to accept price hikes from Chinese exporters to above US$400/tonne CFR ASEAN Port, starting off
April in a wait-and-see mode. But by the second week of April, seeing
continuous increases in Chinese prices, trading activity picked up and
both re-rollers and traders began placing orders.
60.0
550
Apr-14
May-14
440
430
420
31-Mar-16
410
06-Apr-16
400
390
370
10-May-16
380
360
Mar-18
Jan-18
Feb-18
Nov-17
Dec-17
Sep-17
Oct-17
Aug-17
Jul-17
Jun-17
May-17
Apr-17
Feb-17
Mar-17
350
Jan-17
Each round of price increase was swiftly accepted by the spot market,
as buyers expected the price rally to continue. However, with falls in
Chinese domestic prices at the end of April, market participants started
to express their doubts about the longevity of the domestic price uptrend and withdrew from the market.
Dec-16
With global steel prices continuing to strengthen and a lack of competitive imports, Turkish steel producers repeatedly hiked their offers with
asking prices moving firmly above the US$500/tonne mark by the end of
April, and some mills were quoting as high as US$550/t.
Oct-16
Nov-16
Turkey
The North European HR coil swap (basis TSI) curve was in backwardation on May 10, 2016 (see page 4). Swaps throughout the
2016 period were marked at 400/tonne and then dropping to
390/t over the 2017 contract months.
Sep-16
Trade data from the Official Statistics of Japan indicated that exports of
Japanese HRC into the ASEAN region increased by 10% month-onmonth, reaching 430kt in March.
Aug-16
Jul-16
Jun-16
Apr-16
Trade Data
May-16
Chinas steel purchasing managers index (PMI) moved above the 50points threshold for the first time in two years, as the index jumped to
57.3 in April, up 7.6 points in a month. Sub-indices including production,
new orders and new export orders all posted large increases, while
finished product inventory continued to shrink, implying that the market
was improving in what has traditionally been the busiest season.
Mar-16
Source: SGX
April 2016
515
Publishing its latest Short Range Outlook, the World Steel Association
(WSA) remained pessimistic about the near-term future of the industry.
WSA cut its previous global steel demand forecast for 2016 from 1.5
billion tonnes to 1.48 billion tonnes (-0.8% year-on-year) after noting a
contraction of 3% y-o-y in 2015. A slowdown in China is expected to
continue, but steady growth is predicted in the NAFTA region and the
EU. For 2017, the Association forecasts an improvement in steel demand in all markets except China.
355
Historical
475
Forward
435
395
Northern Europe
315
Southern Europe
275
UNITED STATES
SINGAPORE
CHINA
Canary Wharf
Suite 306
Pittsburgh, PA 15203
Marina Maliushkina
europe@thesteelindex.com
Kurt Fowler
america@thesteelindex.com
Tim Hard
asia@thesteelindex.com
Julie Jiang
china@thesteelindex.com