Steel Products Prices North America
March 24, 2020
Raw Materials Prices: Iron Ore, Coking Coal, Pig Iron, Scrap, Zinc
Written by Peter Wright
Raw materials prices are poised for a rapid decline as the dollar strengthens and the global economy slumps.
Table 1 summarizes the price changes through March 18 of the five materials considered in this analysis. It reports the month/month, 3 months/3 months and 12 months/12 months changes on a percentage basis. This is likely our last summary before an impending crash. The currencies of Brazil and Australia are in freefall, which will put downward pressure on iron unit prices. On the demand side, the big three auto companies in the U.S have announced that they will be suspending operations on March 20 and the price of West Texas Intermediate crude has breached $20 per barrel. We looked back at 2008 and 2009 to see how the recovery progressed from the Great Recession. It took about 18 months for prices to recover from that bottom, but the situation was too different to draw any conclusions. The first half of 2008 was a global commodity boom; this was not the case in 2019 and early 2020.
