Steel Price Tracker:Cost inflation kicks in -US prices conti

2019-10-14 08:43栏目:财经

Steel equities continue to be volatile, driven by macro woes and commodity pricemovements. Although current spot conditions remain strong, we still expect costsupport to fade, and thus, European prices to fall (current spot conditions wouldimply further significant earnings upgrades across the space). Our top picks are:1) ArcelorMittal, which looks attractive to us based on strong cash flow (7-12%FCF yield), valuation and additional upside optionality; and 2) Voestalpine, whichwe believe has more room for upgrades, generates strong underlying CF (9-10%FCF yield) and has a less volatile business model.

    HRC: European prices were stable.

    Last week, S. European prices were stable at E519 (up in USD terms by USD6to USD625) and N. European prices were also stable at E535 (up in USD termsby USD6 to USD645). Prices have fallen E7 in the past three months. Yet, severalEuropean players have started to push for a E20/t price hike.

金莎娱乐手机版,    US HRC prices up USD9; Chinese export prices were stable.

    US HRC prices were up USD9 last week and US players announced price hikes ofUSD40/t. The price differential with China increased to USD149/t. Chinese HRCprices were stable at USD572. The spread between Chinese and S. Europeanprices rose to USD53, less than the two-year average spread of USD58, withChinese prices up E8 (up USD22) in the last three months.

    Plate: N. European prices down E4; US prices up strongly by USD46.

    N. European prices were down E4 to E575 (up USD2 to USD693). Prices rose E1in the past month. S. European prices were stable at E550 (up in USD terms byUSD6 to USD663). US prices were up by USD46 to USD814 (up E33 to E675) andUS players announced another USD50/t price hike.

    Iron ore: Fines 62% Fe prices up USD2/dmt; coking coal: prices down USD2.

    The price of Fines 62% were up by USD2 WoW to USD78/dmt. Chinese steeloutput decreased 1.7% WoW to 1.73mt/day in the first ten days of December.

    Prices of premium coking coal (Australian exports) decreased by USD2 to USD260last week. They were stable in euro terms at E217.

    Scrap: European prices up USD1.

    European prices were up by USD1 to USD358/t, while Turkish prices were upUSD1 to USD372/t last week. If current prices were to remain stable until end-Q1, the QoQ price increase for European scrap in Q1 would be USD47.

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