The Advance/Decliner Index is our effort to quantify the anecdotal price information we find in our every day reading about global steel price trends. We also are looking at relative prices in the U.S. versus abroad in our attempt to gauge international price pressure/opportunities heading our way.
Advance/Decliner Index Eases
Our Advance/Decliner Index fell to 81% from 89% last week, declining for the second week in a row but posting the seventh consecutive week above 80%, as some shakiness in global strength is somewhat mitigated by a robust week out of China. Our China index soared from 50% to 85% this week as concerns about tight credit and high inventories have died down. The Chinese market is still very quiet leading up to the New Year holiday beginning next weekend, so we believe some volatility in the China index stems from a low number of data points.
China’s Surge Returns; Flat-Rolled Posts Another Strong Week
China posted six price increases, followed by Pakistan with five, Turkey and India with four and the US with three. The UK, Malaysia, Columbia, Egypt and Brazil had two increases, while Iran, Vietnam, Italy, the Dominican Republic, Japan and Europe had one price hike apiece. There were two price cuts in India and Vietnam, while Malaysia, the CIS, China, Italy and Turkey each saw one decline. Flat-rolled products had 16 price increases, followed by rebar with six, plate and pipe with five each, while semi-finished steel had four and beam posted two price hikes. Rebar had four price cuts, followed by Flat-rolled with three and semi-finished steel with two price declines.
Relative Domestic Prices Start Strong in February
US prices continue to move up with particular strength in rebar and HRC relative to their peer groups thus far in February. US rebar prices are up 11% from January and have posted increases relative to China and Europe where prices have slid modestly lower, and versus Japan where prices are up 7.8% after falling 6% the month before. Plate prices rose another 5.4% so far in February, and are up relative to China and Europe where prices are up slightly. Absolute HRC prices in the US have risen 13% after increasing 8% last month, and are up sharply relative to China and Europe where prices slightly fallen slightly, and up relative to Japan where prices have risen 6.8%. Domestic beam prices began February flat at $675/ton and are up relative to Europe where prices have fallen 2% and down relative to China and Japan where prices are up 1%, and 6.2%, respectively.
With the exception of beams, where domestic prices are struggling to compete with low-priced imports and market conditions show no signs of life, domestic prices have continued their January surge into February as raw material costs remain high, inventories are low and the demand outlook for the spring continues to improve. We expect to see even further pricing strength with the Chinese market regains its footing after the New Year holiday.