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Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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January 2020 | Steel Forecaster


Margin Analysis: 13 January 2020


A roundup and analysis of margins for week of 13 January 2020.

Click here to view Key Region Margins


US HRC margins, $/tonne



US steelmakers announced a new round of coil price increases in early January, pushing HRC prices to $670 at the end of last week. Steel prices outperformed scrap in the past month, leading to a rise in the HRC-scrap spread to $373 last week, with the spread steadily increasing since late October following numerous price hikes. Despite a prevailing HRC price downtrend in 2019, the HRC scrap-spread averaged at $364, 4% above the long-term average value of $351. Premiums of re-rollers of Brazilian slab have also recovered in recent weeks, rising to $248. But 2019 was a worse year for them compared with EAF mills, as the HRC premium over slab averaged $221, 9% below the long-term value of $242. All prices quoted on the $ per tonne basis.


Definitions

Spread
Premium between a steel product and a steel raw material

Premium
Extra above the cost of the feedstock for the product next along the conversion chain

Differential
Difference between same type of product from different regions/benchmarks

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