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Chinese steel production led global production lower last quarter, as the country produced 243.5 million mt, down 10.5% year-over-year, according to the World Steel Association. Total global steel output fell by 6.8% to 456.6 million mt, compared to Q1 2021. Of the top 10 steel nations, only India had a production increase, making 31.9 million mt, up 5.9% compared to Q1 2021. The supply decrease coincided with a rallying steel market; for example, April CME HRC futures are up nearly 54% from the January lows. US production was down a mere 0.4%, as we produced 20.3 million mt. |
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Consumers who are concerned about their HRC steel input costs should consider financial swaps or purchasing call options. Such positions are standard for consumer hedging, but they can result in opportunity costs or cash costs if metal prices decline. Please contact AEGIS for specific strategies that fit your operations. (4/25/2022) |
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Note: Clients with AEGIS Platform access can see this and other research, plus hedge portfolio reporting and tools here. |
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AEGIS Insights |
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04/20/2022: AEGIS Factor Matrices: Most important variables affecting metals prices 04/21/2022: Russian Metals Production and Related News: Most Recent Developments (AEGIS Reference) |
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4/22/2022: March 2022 crude steel production |
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| Important Disclosure: Indicative prices are provided for information purposes only, and do not represent a commitment from AEGIS Hedging Solutions LLC ("Aegis") to assist any client to transact at those prices, or at any price, in the future. Aegis makes no guarantee to the accuracy or completeness of such information. Aegis and/or its trading principals do not offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program.
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