BHP Billiton Feels Pain, Raw Steel Shows Lower Coking Coal Price

Is this yet another indication that the commodities supercycle has crashed and burned?

Via Mining.com: With BHP Billiton’s stock price sinking to a 4-year low, Kevin Cook, senior stocks strategist at Zacks.com, says that “the overall theme for commodities since 2011 has been dis-inflation. And as long as the world’s most important central banks are stepping back from further monetary stimulus, and China’s appetite for raw materials slows down, the earnings trajectory for metals and mining companies may still be downward.”

Here’s how our friend Bob Garino, now writing for Export Tax Advisors, sees it: “The domestic market must look mighty attractive for Asian and European producers given that we also don’t see a quick recovery in global steel prices, based on our view of the fundamentals.”

“In sum, we see limited third quarter upside for domestic producers and import opportunities for domestic steel buyers,” Garino writes.

The week’s biggest mover on the weekly Raw Steels MMI® was the cash price of steel billet, which saw an 8.0 percent increase on the LME to $135.00 per metric ton. This comes on the heels of a 3.8 percent decline the week prior. The 3-month price of steel billet rose 6.9 percent on the LME to $155.00 per metric ton after falling 3.3 percent during the previous week.

Chinese steel prices were mixed for the week. The price of iron ore 58% fines from India kept relatively steady, and the week finished with no movement for Chinese HRC. After a 1.4 percent decline, however, Chinese coking coal closed out the week lower. Chinese slab also fell 0.6 percent over the past week.

A 2.0 percent gain landed the US HRC futures contract 3-month price at $617.00 per short ton. Closing at $600.00 per short ton, the US HRC futures contract spot price remained unchanged for the week. US shredded scrap remained essentially flat from the previous week.

Korean steel prices were flat for the week. Korean steel scrap remained unchanged for the week. Korean pig iron prices held steady from the previous week.