Time for revival?
The HRB export price has switched directions about every 6 to 12 months over the past 25 years and usually regardless of the trend in underlying steel demand. Since 2010, the HRB export price trend has reversed roughly about 36 times, for an average duration of 10 months. Interestingly, since the HRB export price declined from the February of 2019 and bottomed in the height of the pandemic on April 2020 for a duration of 14 months; from there it rallied for a full 13 months until May 2021; it is now on its downward trend for the past 8 months; hence, if by May 2022 there’s no improvement, this would be a duration of about 12 months. However, Steel’s “Last Hurrah” as WSD discussed previously began to show signs of rallying in February 2022.
Products for which prices are highly volatile include prime scrap, obsolete scrap, iron ore, coking coal, metallurgical coal and commodity grade steel products.
Hence, given the regularity of swings in price direction, this is one of the reasons in December 2021 that we were forecasting a sizable rise in the HRB export price by about Spring 2022 as Steel’s “Last Hurrah” before a significant downturn for the rest of the year.
As for the USA HRB price, the price trend has reversed roughly about 46 times, for an average duration of 6 to10 months since 2010. The USA mills has enjoyed a significant time of profitability since Section-232 was implemented in the middle of 2018 and prices skyrocketed in the last 18 months since July 2020 where it bottomed from a few months of downturn because of Covid-19. The USA price only showed signs of retreat beginning November 2021.
This report includes forward-looking statements that are based on current expectations about future events and are subject to uncertainties and factors relating to operations and the business environment, all of which are difficult to predict. Although we believe that the expectations reflected in our forward-looking statements are reasonable, they can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties, including among other things, changes in prices, shifts in demand, variations in supply, movements in international currency, developments in technology, actions by governments and/or other factors.
The information contained in this report is based upon or derived from sources that are believed to be reliable; however, no representation is made that such information is accurate or complete in all material respects, and reliance upon such information as the basis for taking any action is neither authorized nor warranted. WSD does not solicit, and avoids receiving, non -public material information from its clients and contacts in the course of its business. The information that we publish in our reports and communicate to our clients is not based on material non-public information.
The officers, directors, employees or stockholders of World Steel Dynamics Inc. do not directly or indirectly hold securities of, or that are related to, one or more of the companies that are referred to herein. World Steel Dynamics Inc. may act as a consultant to, and/or sell its subscription services to, one or more of the companies mentioned in this report.
Copyright 2022 by World Steel Dynamics Inc. all rights reserved