Steel Drops 30 to 50 Percent in Price since Late July

A global trend toward less demand and lower pricing for steel has become pronounced since late July, according to a summary prepared by the London Metal Exchange (LME).

Writing in the Autumn edition of the LME’s Ringsider e-newsletter, Roger Manser, managing editor of Steel Business Briefing, London, says that since late July, pricing for billet in the Mediterranean region has dropped by some $400 per metric ton, while prices paid for rebar in the Black Sea region have actually been cut in half from that time—from $1,300 per metric ton in late July to as low as $650 in late September.

Manser says he anticipates that the fourth quarter will witness production cutbacks (and thus less scrap being melted) as inventories of finished steel are reduced.

The LME assessment blames a slowdown in Chinese construction for causing inventories of finished steel to build in that nation first. Subsequently, Chinese exports have helped bring excess finished steel to the market in other parts of the world, including the Middle East.

If steel demand is to strengthen, Manser cites a return to pro-construction and economic development policies in Beijing as a key ingredient.

More information on the LME and its services can be found at www.lme.com.