Qingdao Finetools Co,.LTD

  

Your present location:HOME >> INDUSTRY NEWS >> Why Chinese Steel Prices Still Matter for U.S. Steel

Why Chinese Steel Prices Still Matter for U.S. Steel

Date:2016-12-22

Chinese steel prices

As discussed earlier in this series, iron ore prices have seen upward price action in 2017 after rising more than 84% in 2016.

Also, although coking coal prices have lost some of their 2016 gains, they’re still at a much higher price level compared to early 2016.

Higher raw material costs

Chinese steel prices have also seen upward momentum this year, and they’ve built on last year’s gains. The above graph shows the movements in Chinese HRC (hot rolled coil) prices plotted against benchmark iron ore prices.

As we can see, the two have generally been moving in tandem with each other. Steel prices in China have also risen this year alongside the upward movement in iron ore prices . This rise isn’t surprising given that Chinese steel mills rely heavily on seaborne iron ore. The country accounts for two-thirds of seaborne iron ore demand.

Impact on US steelmakers

So, what do Chinese steel prices have to do with US steel prices? Currently, China isn’t a major exporter to the United States. The country accounts for only ~2% of US steel imports. Having said that, Chinese steel prices impact steel prices all over the world. Higher Chinese steel prices tend to put a floor under international steel prices.

As Chinese steel prices rose last year, we saw rises in steel prices in other regions as well. Higher international prices increase the landed cost of steel imports in the United States, indirectly helping US steel pricing for steelmakers such as U.S. Steel Corporation (X), AK Steel (AKS), Nucor (NUE), and Steel Dynamics (STLD).

Furthermore, the Chinese government’s efforts to curtail the country’s excess steel capacity is supporting Chinese steel prices. We should remember that the key issue facing the steel market is excess capacity, especially in China. But are the Chinese government’s publicized capacity cuts reflected in its steel production? We’ll find out in the next article.

TypeInfo: INDUSTRY NEWS

Keywords for the information:

QINGDAO FINETOOLS CO.,LTD  
Add:Wanjia industrial park,Pingdu,Qingdao,China.  

Tel:   +86 532 58695833;+86 532 58697171

Mob: +86 15265251777

Fax:  +86 532 88827111  

E-mail:  kelly@jk-china.net   info8@jk-china.net

www.chinatoptools.com  鲁ICP备00000000号 | powered by ce300

 

window seal

lathe tool