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A treacherous year for steel buyers

If you are a steel buyer, 2008 has so far been a treacherous year. Consider the following...

Since late December 2007 through early June 2008, the Platts-assessed price of hot-rolled coil (HRC) in the US market is up 88%, nearly $500/short ton -- from $565/st ex-works Indiana to nearly $1,060/st.

Over the same period, the Platts price assessment of HRC in Europe surged 78%, or Eur225/metric ton (about $350/mt) ex-works Ruhr to Eur705/mt, from Eur480.

Domestic plate prices in the US increased 54% since December 2007.

Cold-rolled coil (CRC) in the US market is up 79% since December 2007 to $1,130/st ex-works Indiana from $635/st. In the EU CRC is up to Eur770/mt ex-works Ruhr in early June from Eur550, or 40%, since December. (See chart on US hot-rolled coil price.)

The Platts Eastern Mediterranean rebar export price was $630/mt FOB Turkey in December 2007 -- and has almost doubled to $1,200/mt most recently, an increase of 90%.

In the US market, domestic rebar is up about $300/st to roughly $900/st ex-works US Southeast mill since December.

In Northwest Europe, the Platts price assessment of rebar has swelled nearly Eur340/mt (about $530) to Eur780 exworks NEW, since December.

The Platts-assessed price of imported plate in Europe has risen 27% to Eur830/mt (about $1,295/mt) in early June 2008 from Eur655/mt CIF Antwerp in December.

Domestic EU plate has also gained nearly 27%, increasing to Eur845/mt from Eur670 over the same time period.

Domestic plate prices in the US increased 54% since December 2007. The Platts price most recently was at $1,240/st ex-works Southeast US mill, up from $805/st.

Imported plate has gained 47% over the same timeframe, to $1,130/st CIF Houston from $770/st in December.

Scrap prices have surged in all regions. The Platts assessed A3 grade price is up 99% to $680/mt FOB Black Sea from $342.50/mt in December.

In the US the price of shredded ferrous scrap has increased 92% to $590/lt delivered Midwest mill in early June 2008 from s $307.50/lt in December 2007.

Mills have seen their own raw material costs escalate -- especially for iron ore, scrap and coking coal. All have imposed surcharges to contract-market prices on the order of $250/st.

In both the US and European markets, steel mills have the pricing clout.

In the US, mills have announced spot-market increases on an almost weekly basis -- many of those well in excess of $50/st at a time. The same holds in Europe.

Created: June 26, 2008

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