More steel is being made, bought and sold than ever before. But establishing a pricing index such as is found with many other metals has remained an elusive goal.
Three presenters offered their views on how a steel price index may finally take shape at a session at the ISRI (
“We feel our international reach is critically important,” declared Martin Abbott of the London Metals Exchange (LME), regarding his organization’s credentials to establish a steel pricing contact system.
Abbott said one consideration includes determining which and how many types of steel products to include in such a system. Additionally, the LME will have to overcome several of what Abbott called “myths” of pricing contracts, including that they create volatility by encouraging speculators to take part in the market.
The New York Mercantile Exchange (NYMEX) has been unveiling its ClearPort Clearing and Steel Futures system. “After oil, steel is the second [largest volume] commodity in the world; obviously, there is a need for this,” said John Conheeney of NYMEX.
In the ClearPort system, prices for benchmark steel products will be disseminated daily, according to Conheeney.
The research and analysis firm World Steel Dynamics, Englewood Cliffs, N.J., is also gathering steel pricing information, according to the company’s Patrick McCormick.
The company’s Steel Benchmarker system involves “collecting price opinions,” said McCormick, from some 100 participants throughout the materials chain from steel mills to “scrappies.”
Regarding scrap pricing, audience member Ralph Pinkert of Management Science Associates,