News - Global steel prices start to rise

Global steel prices regained momentum around the market rose again

The international steel market shuddered to the upside in February. During the reporting period, the House of Steel Global Steel Benchmark Price Index of 141.4 points rose 1.3% week-on-week (from a decline to an increase), 1.6% month-on-month (unchanged from the previous) and 18.4% month-on-month (unchanged from the previous). The flat steel index was 136.5 points, up 2.2% week-on-week (widening); the long steel index was 148.4 points, up 0.2% week-on-week (turning from down to up); the Asian index was 138.8 points, up 0.4% week-on-week (turning from down to up). In Asia, the China index 132.4 points, up 0.8% week-on-week (from down to up); the Americas index 177.6 points, up 3.7% week-on-week (expanded); Europe index 134.5 points, up 0.8% week-on-week (from down to up).

International steel prices regained their uptrend after a brief correction, largely confirming the previous forecast. From a fundamental point of view, the market around the general upward trend, to the industry has the expectation of unfinished business. From the logic of the operation, the trend after the finishing of the intermediate storage trend, perhaps more aggressive. Especially in the post-epidemic recovery, post-disaster reconstruction, supply reduction and other "bitter" steel needs, the market may go farther, the stage of the high point or will be shown in the near future.

　　According to the development trend combined with the underlying situation forecast, the international steel market in March or continue to shake upward trend. (See Figure 1)

Global steel production in the first month: down 3.3%; excluding mainland China down 9.3%. WSA data show that: in January 2023, the world included in the WSA statistics of the main 64 countries and regions crude steel production 145 million tons, down 3.3% year-on-year, reducing crude steel production by 4.95 million tons; global (excluding mainland China) steel production 65.8 million tons, a big drop of 9.3% year-on-year, reducing production by 6.72 million tons.

ArcelorMittal plans to restart a blast furnace at its French steel plant. ArcelorMittal said it had decided to restart blast furnace No. 2 at its French steel plant in Fosse-Maritimes in April as European plate prices continued to rebound and the European automotive sector was set to improve in the coming months.

South Korea's POSCO Steel plans to build a new 2.5 million tonne electric furnace. POSCO Steel plans to invest 600 billion won in a new electric furnace and ancillary equipment at its Gwangyang steel plant with a capacity of 2.5 million tonnes of steel per year.

Japan's JFE Steel continues to increase its electrical steel production capacity, and JFE Steel said its new line at the Kurashiki steel plant will be put into production in the first half of fiscal year 2024, when production of non-oriented electrical steel will double.

Faster-than-expected economic restart pushes iron ore prices higher. Goldman Sachs said the latest rise in iron ore prices was largely driven by traders repositioning for a faster-than-expected reboot of the Chinese economy. Goldman also said traders should prepare for a spike in iron ore prices in the second quarter of 2023.

　　Anglo American's South African high-quality iron ore mines have increased significantly. Anglo American's South African iron ore subsidiary, Kumba Iron Ore, said that rail and port bottlenecks have hindered the movement of iron ore, resulting in a significant increase in the company's high-quality iron ore stocks. As at 31 December, iron ore stocks had increased to 7.8 million tonnes from 6.1 million tonnes in the same period last year.

　　BHP Billiton is optimistic about the outlook for demand for the commodity. BHP Billiton said it was optimistic about the demand outlook for fiscal 2024, despite the company's lower-than-expected profit in the first half of fiscal 2023 (to the end of December 2022).

　　FMG accelerates progress on the Belinga iron ore project in Gabon FMG Group signed a mining convention with the Gabonese Republic for the Belinga iron ore project in Gabon. Under the convention, mining will commence at the Belinga project in the second half of 2023 and it is expected to become one of the world's largest iron ore production centres.

　　Nippon Steel to invest heavily in Canadian mining company. Nippon Steel said it will invest 110 billion yen (approximately RMB 5.6 billion) in a Canadian mining company using raw coal and receive 10% of the common shares. At the same time, with an interest in high-quality raw coal, it will implement and cut CO2 emissions from ironmaking.

　　Rio Tinto iron ore target cost of US$21.0-22.5 per wet tonne. Rio Tinto reported 2022 financial results saying: Rio Tinto Group 2022 EBITDA of US$26.3 billion, down 30% year-on-year; 2023 iron ore production guidance target of 320-335 million tonnes and iron ore unit cash cost guidance target of US$21.0-22.5/wet tonne.

　　Korea sets up low-carbon fund to help decarbonise domestic steel industry. South Korea's Ministry of Trade, Industry and Energy said it will set up a fund amounting to 150 billion won (US$116.9 million) to support domestic steelmakers in decarbonising their steel production processes.

　　Vale supports the construction of a low-carbon and hydro-metallurgical laboratory at CSU. Vale said it will donate US$5.81 million to support a new low carbon and hydrogen metallurgy laboratory ("New Lab") at CSUN. The New Lab is expected to be operational in the second half of 2023 and will be open to all researchers in the mining and steel industries at that time.

　　Asian steel markets: steady to up. The 138.8-point Steel House benchmark steel price index for the region rose 0.4% week-on-week (from a decline to an increase), rose 0.6% month-on-month (a convergence of gains) and fell 16.6% month-on-month (a widening of losses). (See Figure 2)