July 29, 2021 – Chinese steel and stainless steel prices rose again today, even if analysts had already again sung farewells to the Chinese market. Aluminum, nickel and other important values further in the plus. India and Brazil increasingly focus on the domestic steel market. Scrap availability remains severely limited. And U.S. President Biden strengthens Buy American policy.

Stainless Espresso: Steel and stainless steel prices continue to rise
Stainless Espresso: Steel and stainless steel prices continue to rise

Chinese steel and stainless steel spot prices and futures up

Chinese steel and stainless steel prices, on the spot market as well as in the futures on the SHFE, are trending further into positive territory today. Especially the HC futures are clearly ahead with currently 3.34%. Followed by SS futures with 3.11%. On the Chinese spot market, prices for finished steel products remain stable and stainless steel spots continue their rise by up to 4.39%.

Smallest movements on the steel market trigger downturn chants

Some media are reporting a decline in demand for construction steel in China. Some so-called experts see this as a potential reduction in crude steel demand. What is being left out, however, is the fact that the general supply of steel or crude steel has already been reduced considerably for months and is still being reduced.

China is consistently reducing overcapacity in crude steel production

The fact is that for more than half a year now, plants have been continuously closed or capacities reduced. In addition, the upcoming export taxes will fuel the price in the export market rather than lower it.

Source: shfe.com.cn, dce.com.cn

Facts, figures: Nickel and aluminum futures continue to rise

Nickel futures on LME (+1.2%) and SHFE (1.01%) are pointing into positive territory today again. HRC futures on SHFE (+3.18%) and US Midwest Domestic HRC futures on CME for August (+0.43%) and September (+0.66%) are also up again. Aluminum also continues to trend higher (SHFE: +1.11, LME: +0.79%).

As mentioned above, stainless steel prices in the Chinese spot market are up by up to 4.2%. And stainless steel prices in futures are up more than 3%.

Source: shfe.com.cn, dce.com.cn, lme.com, cmegroup.com

India and Brazil focus more on domestic spot market

The major steel producers India and Brazil, are focusing more on the domestic spot markets, according to recent reports. Especially the rumors about a Chinese export tax on steel and changing market conditions, have made it more attractive in both countries to generate sales domestically instead of relying on exports.

Availability on the steel and stainless steel scrap market remains tight

Stable and further increasing prices for steel and stainless steel scrap are reported from the United States and Japan. The background to this is the high demand in the United States, which relies almost primarily on electric arc furnaces for steel production. In Japan, steel producers have currently reduced the input of steel scrap, but the availability of scrap is low, which keeps prices up.

President Biden strengthens Buy America policy

In the United States, President Joe Biden and Commerce Secretary Gina Raimondo have reiterated their desire to strengthen the Buy American policy and reaffirmed the effectiveness of existing market protection measures, especially for steel. The American Iron and Steel Institute (AISI) expressly welcomes this.

However, some voices never tire of criticizing the current U.S. policy and its protectionism. The CATO Institute takes a current look at the strengthening of Buy American rules and what impact they have on a quintessentially American company like truck manufacturer MACK.

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