monthly report overview
- Iron ore surged to a high in mid-May, when spot prices reached $235. Prices since fell as China cut steel output in H2 to reduce output below 2020s 1.065 billion mt to reduce both pollution and energy usage.
- Freight rates hit 13 year high on Monday 1st October as the Baltic Dry Index (BDI) hit 5,267, its highest level since September 2008. Gains have been in capsize vessels which transport iron ore and coal. Panamax fell and supramax marginally fell. Any fall in demand and price of the underlying steel is being mixed with the freight increase creating an unclear picture for market participants.
- Higher freight rates were also encouraging regional trade rather than from further afield with potentially longer lead times and a higher freight component.
- Turkey scrap fell 2% during the month but signs of recovery at the end of the month with higher bookings into Turkey from Baltic and continental Europe. Scrap collectors are targeting higher prices for October and November shipments.
- Turkey re rolling mill margins remained at high level of $225/mt average but 10 lower than August. Dollar strength against the lira has not impacted domestic Turkish rebar demand.
- US HRC +3.6% MoM to 1,958 continued to increase, adding another $40/st on the month, similar to August on continued tight supply and strong demand.
- HRC Europe -6% MoM to 1,070 with weaker sentiment in both north and south Europe as buyers delayed purchases and simultaneously mills reoffered tons that were originally destined for the automotive sector.