Monthly Metal Buying [email protected] Tel. 773.525.9750 3 Editor’s Highlights 11 F M A M J J A S O N D 12 F M A M J J A S O N D13 F M A M J J A S O N D14 F M A M

FORECAST REPORT JULY 2015

Monthly Metal Buying Outlook

[email protected] Tel. 773.525.9750

CONTENT NOT TO BE CONSTRUED AS A SOLICITATION OR RECOMMENDATION OF ANY KIND.

The opinions expressed in this report are subject to change without notice. This report

includes information from sources believed to be reliable and accurate as of the date of this

publication, but no independent verification has been made and we do not guarantee its

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MetalMiner does not intend the information in this report to be construed to be personalized

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Disclaimer

2

Lisa ReismanExecutive Editor, [email protected]. 773.525.9750


Editor’s HighlightsHighlights during the month of June

The USD is experiencing a correction after making a big upside move; we remain bullish on the dollar and believe it is holding its value well

As news breaks on the Greek crisis, we could expect to see additional currency volatility due to Euro weakness and a flight to the USD (the dollar’s strength is nearly always bearish on metals prices)

We remain bearish on all commodities

US trade legislation could change the longer term fundamentals of some of the metals but the overall impact remains to be seen

Some of the “better” performing metals are no longer performing well (e.g zinc and aluminum)


Editor’s Highlights

11 12 13F M A M J J A S O N D F M A M J J A S O N D 14F M A M J J A S O N D 15F M A M J J A S O N D F M M JA210220230240250260270280290300310320330340350360370

223.58

Thomson Reuters/Jefferies Index (CRB): July 1, 2015

Commodities held steady in June and so did oil prices, which held at about $60 per barrel. The dollar depreciated against other currencies in June, which usually provides support to commodity prices but did not this month. The dollar, however is still holding its value well despite a small retrenchment this month. The dollar index has been range-bound for the past 5 months.

The CRB index remains at low levels. A move above May’s highs would indicate a potential shift in market sentiment and is something worth watching. However, until that happens, commodities remain in bearish mode, and that is weighing on base metal prices. A weaker dollar and higher oil prices could help push other commodity groups higher but that hasn’t been the case yet. Meanwhile, oil prices held relatively well in May, though we could see some price declines next month. Industrial metals led the largest price declines for all commodities.

The long-term trend for commodities remains down. The shorter-term trend appears range bound with few signs of upside potential.

LONG TERM TREND

DOWN

SHORT TERM TREND DOWN

LONG TERM TREND

DOWN

SHORT TERM TREND RANGE BOUND



11 12 13F M A M J J A S O N D F M A M J J A S O N D 14F M A M J J A S O N D 15F M A M J J A S O N D F M A M J

15.015.516.016.517.017.518.018.519.019.520.020.521.021.522.022.523.023.524.024.525.025.5

14.37

PowerShares DB Base Metal Fund: July 1, 2015

Unlike other commodities, industrial metals fell sharply in June, and appear as the worst performer of all commodities. The Powershares DB Base Metals Fund, which tracks base metals, made a fresh 6-year low. This suggests to us that buying long-term forward does not make much business sense.

Zinc and lead suffered remarkable losses. These two metals held their value relatively well compared to other base metals throughout this year but across-the-board weakness continues to push prices lower, even those with good fundamentals.

Although some individual metals might offer good trend short-term buying opportunities, the long-term trend remains down and therefore risky to commit large volumes in this kind of environment. However, organiza-tions should be vigilant looking for signs that the trend has started to reverse.

LONG TERM TREND

DOWN

SHORT TERM TREND DOWN

LONG-TERM TREND

DOWN

Strong move off recent lows


Index


Aluminum

Copper

Nickel

Lead

Zinc

Tin

HRC

CRC

HDG

Plate

2

5

6

7

8

9

10

11

12

13

14


Industrial buying strategy

Aluminum continued to fall throughout June closing at $1,686/mt, a 3+% decline from our previous monthly report and just above key support levels. The back-story remains exactly the same as one month ago in terms of global oversupply, falling MW premiums and the potential return of the stock and finance trade. What has changed are some of the details within each of these drivers. None have fundamentally changed the monthly outlook.It’s All in the OutputWorld production of primary aluminum has grown 12% from one year ago. This is the fastest growth rate since 2011. The notion that China will curb production remains a pipedream. In fact, global producer UC Rusal pointed to rising Chinese aluminum exports as evidence of no checks on Chinese aluminum production. Combine that with a new “Make in India” campaign and we see a similar situation developing there – more capacity. The bottom line: aluminum prices may need to fall further and it will be the non-Chinese producers that take out capacity. Watch the MW PremiumsLast month this report indicated the conditions appear “ripe” for the stock and finance trade – a strong forward curve combined with low interest rates may be all that is needed to soak up excess inventory and re-start the warehouse trade. MetalMiner analysis of LME data, however, suggests that total tonnages stored in Detroit warehouses are indeed declining meaning we don’t yet see any evidence of the return of the stock and finance trade. Nevertheless, aluminum buying organizations will want to pay close attention to this development.In the meantime, semi-finished aluminum prices are under pressure. Physical delivery premiums have come down nearly to their historic levels of $100-125/ton and mills are short of work so the conversion premium is under considerable pressure. In Europe, a weak Euro is helping mills export but there is limited demand placing downward pressure on prices.The OutlookMetal prices are falling across the board, and some of them have already fallen below key support levels. Based on current market conditions, it’s likely that aluminum prices will keep trending lower. Therefore, making long-term commitments is not a good idea until we see real signs of strength. We do, however, leave open the possibility of rising premiums as an indicator of the resumption of the stock and finance trade.

1686

1670

1800

Support and Resistance Indicator

Aluminum Al

Current Price

Resistance

Support

JAN-14

FEB-14

MAR-14APR-14MAY-1

4JU

N-14JU

L-14

AUG-14SEP-14OCT-1

4NOV-

14DEC-14JA

N-15FE

B-15MAR-15APR-15MAY-1

5JU

N-15

$0.00

$0.05

$0.15

$0.25

$0.10

$0.30

$0.20

US Midwest Premium Futures 3 mo

US Midwest Premium Futures Spot

CME AUP MW Premium

JUL AUG SEP OCT NOV DEC 2015 MAR APR MAY JUN JULFEB

1705

1736

1767

1798

1829

1860

1891

1922

1953

1984

2015

2046

2077

2108

16741686

LME Aluminum: July 1, 2015

ResistanceSupport

1686

1670

1800


Aluminum Al

Current Price

Resistance

Support

JAN-14

FEB-14

MAR-14APR-14MAY-1

4JU

N-14JU

L-14

AUG-14SEP-14OCT-1

4NOV-

14DEC-14JA

N-15FE


5JU

N-15

$0.00

$0.05

$0.15

$0.25

$0.10

$0.30

$0.20



CME AUP MW Premium


1705

1736

1767

1798

1829

1860

1891

1922

1953

1984

2015

2046

2077

2108

16741686


ResistanceSupport

1686

1670

1800


Aluminum Al

Current Price

Resistance

Support

JAN-14

FEB-14

MAR-14APR-14MAY-1

4JU

N-14JU

L-14

AUG-14SEP-14OCT-1

4NOV-

14DEC-14JA

N-15FE


5JU

N-15

$0.00

$0.05

$0.15

$0.25

$0.10

$0.30

$0.20



CME AUP MW Premium


1705

1736

1767

1798

1829

1860

1891

1922

1953

1984

2015

2046

2077

2108

16741686


ResistanceSupport

Market Commentary

Aluminum Al

1 Dollar to Euro exchange rate2 Primary aluminum production3 China export volumes4 MW Premiums5 Capacity utilization6 Oil prices7 European & Japanese premiums8 China GDP & PMI data

Aluminum Drivers

For the short-term, buy as needed. Should prices break above short-term resistance at $1,800/mt consider covering for short-term requirements. For longer-term purchases, we see no reason to place forward buys.


Copper Cu

China Demand is the Name of the GameChina really controls the copper story. Poor demand and near-term copper supply suggest copper will continue to struggle. Chinese government spending, construction spending, auto sales and power grid investment serve as the key drivers to Chinese demand as well as price support. Power grid investment has fallen. Each of these remaining indicators has fallen month over month from April to May and year over year.Our own MetalMiner IndX™ China industrial copper price data shows that copper prices have already fallen by over 5% in June compared to May data. In addition, the average monthly prices in the chart below suggest that indeed Chinese industrial demand remains muted as prices are markedly lower compared to last year. The OutlookThree-month copper closed the month of June at $5,760/mt, down nearly 4+% from last month. Copper prices rallied up until May but have continued to fall. Copper remains in a long-term bearish market despite the fact that the dollar has begun trading sideways. Moreover, throw in a bit of Greek uncertainty and the global price picture for copper looks a bit murky (some believe a successful Greek outcome would be bullish for copper prices). Nevertheless, we remain bearish.While the rest of industrial metals keep falling, we would expect copper prices to trade below $6,500/mt during the second half of the year possibly diving to record lows.

5760

5550

6200


Copper Cu

Current Price

Resistance

Support

JUN-14

JUL-

14AUG-14

SEP-14

OCT-14

NOV-14

DEC-14

JAN-15

FEB-15

MAR-15

APR-15

MAY-15

JUN-15

0

10000

30000

50000

20000

60000

40000

Primary Copper/China MT (CNY)

JUL AUG SEP OCT NOV DEC 2015 MAR APR MAY JUN JULFEB5320

5453

5586

5719

58525985

6118

6251

6384

6517

6650

6783

6916

7049

7182

5760

LME Copper: July 1, 2015

ResistanceSupport

Source: MetalMiner IndX™

5760

5550

6200


Copper Cu

Current Price

Resistance

Support

JUN-14

JUL-

14AUG-14

SEP-14

OCT-14

NOV-14

DEC-14

JAN-15

FEB-15

MAR-15

APR-15

MAY-15

JUN-15

0

10000

30000

50000

20000

60000

40000



5453

5586

5719

58525985

6118

6251

6384

6517

6650

6783

6916

7049

7182

5760


ResistanceSupport


Market Commentary


1 Dollar to Euro exchange rate2 China copper price (proxy for demand)3 US capacity utilization4 Global production5 Refiner treatment charges6 Chilean copper production

Copper Drivers

For the short-term, buy only as needed. There is no point in buying forward when prices are unable to make substantial upside moves. Even if prices manage to rally in the short-term, prices are likely to come back down. For the medium-term, there is no need for volume commitments as we remain in bearish territory as long as prices are below $6,500/mt.

5760

5550

6200


Copper Cu

Current Price

Resistance

Support

JUN-14

JUL-

14AUG-14

SEP-14

OCT-14

NOV-14

DEC-14

JAN-15

FEB-15

MAR-15

APR-15

MAY-15

JUN-15

0

10000

30000

50000

20000

60000

40000



5453

5586

5719

58525985

6118

6251

6384

6517

6650

6783

6916

7049

7182

5760


ResistanceSupport



Nickel Ni

Nickel fundamentals do not tell a very good story if you are a stainless producer or service center. However, buying organizations likely feel differently about bearish metals. Nickel faces a number of headwinds that will continue to put pressure on prices.

Specifically, nickel suffers from weak demand globally, excess service center inventory levels, an Indonesian export ban that failed to do what it intended to do (we’ll come to that in a moment) and increased stockpiles in China (though we do not accept the one to one correlation that higher inventory levels necessarily equate to lower prices and vice versa, lower inventory levels don’t necessarily equate to higher prices).

Service centers tell MetalMiner that inventory levels remain well above historical “healthy” MOH averages (about 2.4-2.6). Instead, inventory levels are up over 3.5 months, seasonally adjusted. This is a very bearish indicator. Demand has slowed for the typical summer slow-down. Service centers report transactional business is slow.

The Indonesian Export Ban

As many are aware the Indonesian government banned the export of unprocessed minerals back in January of 2014. Instead of having the desired effect of generating new investment for higher value added processing in country, exports have dried up and the government has begun tinkering with the ban to allow for some copper exports. The ban on nickel and aluminum exports remains intact but news reports suggest the ban for bauxite might be lifted which may be an indicator that the government could change its policy.

Regardless, this too is a bearish factor weighing on nickel.

The Outlook

Three-month nickel closed the month of June at $12,000/mt, sliding to a 6-year low. Nickel is in free-fall as shortage expectations faded. The long-term outlook remains bearish, especially while the rest of base metals keep falling. We expect to see high price volatility in the coming months.

12000

10800

13700


Nickel Ni

Current Price

Resistance

Support


11808

12464

13120

13776

14432

15088

15744

16400

17056

17712

18368

19024

19680

12000

LME Nickel: July 1, 2015

ResistanceSupport

12000

10800

13700


Nickel Ni

Current Price

Resistance

Support


11808

12464

13120

13776

14432

15088

15744

16400

17056

17712

18368

19024

19680

12000

LME Nickel: July 1, 2015

ResistanceSupport

Market Commentary

1 Dollar to Euro exchange rate

2 Stainless steel global production

3 Global capacity utilization

4 China coking coal prices

(impacting Chinese nickel pig

iron production)

5 China GDP & PMI data

Nickel Drivers

For the short-term, we expect some price volatility. Consider covering some short-term requirements this month as prices could rally. For longer-term purchases, we see no reason to place forward buys as prices still have downside potential.




Lead Pb

Lead looked a little exciting in May but June has brought prices down on the back of soaring LME inventories (please note MetalMiner does not subscribe to the notion that inventory levels necessarily correlate with metal prices). However, in March a 100,000-ton surge in canceled warrants (metal to be taken out of LME warehouses) does not suggest sudden industrial demand but rather a storage arbitrage, similar to what has happened with aluminum and to a lesser extent, zinc.

China lead prices (not SHFE but industrial trade prices) peaked in early May and have declined ever since according to MetalMiner IndX™ data.

Last month we made mention of data that suggested a global balance between lead supply and demand. The most recent data from the International Lead and Zinc Study Group suggests demand is down across the board from Europe (4.2%), the US (3.9%), China (4.3%) and Korea (9.8%). Nonetheless the market appears in somewhat of a balance. Regardless, we don’t see lead’s fundamentals much differently than some of the other base metals.

The Outlook

Lead prices continued to fall in June closing at $1,761/mt. The rally that we saw in April has already vanished. Neither fundamentals nor technicals support a sustainable price rally. The long-term outlook remains bearish, especially while we see other industrial metals making record lows.

1761

1670

2050


Lead Pb

Current Price

Resistance

Support

JUN-14

JUL-

14AUG-14

SEP-14

OCT-14

NOV-14

DEC-14

JAN-15

FEB-15

MAR-15

APR-15

MAY-15

JUN-15

11000

11500

13000

14000

12500

14500

13500

12000

15000

China Lead Cash Price (RMB)


1800

1845

1890

1935

1980

2025

2070

2115

2160

2205

2250

2295

1761

LME Lead: July 1, 2015

ResistanceSupport

1761

1670

2050


Lead Pb

Current Price

Resistance

Support

JUN-14

JUL-

14AUG-14

SEP-14

OCT-14

NOV-14

DEC-14

JAN-15

FEB-15

MAR-15

APR-15

MAY-15

JUN-15

11000

11500

13000

14000

12500

14500

13500

12000

15000



1800

1845

1890

1935

1980

2025

2070

2115

2160

2205

2250

2295

1761


ResistanceSupport

Market Commentary


2 Global production


4 Automotive production

Europe/NA/China

5 China lead prices

Lead Drivers

In the short-term, prices could bounce after this significant price drop. This month could be a good opportunity for buyers to meet short-term requirements near support. For longer-term purchases, we see no reason to place forward buys as we remain in bearish territory and lead could slide to record lows.

1761

1670

2050


Lead Pb

Current Price

Resistance

Support

JUN-14

JUL-

14AUG-14

SEP-14

OCT-14

NOV-14

DEC-14

JAN-15

FEB-15

MAR-15

APR-15

MAY-15

JUN-15

11000

11500

13000

14000

12500

14500

13500

12000

15000



1800

1845

1890

1935

1980

2025

2070

2115

2160

2205

2250

2295

1761


ResistanceSupport



Zinc Zn

Last month we reported the International Lead and Zinc Study Group suggested 2015 demand for refined zinc would exceed supply by 151,000 metric tons. Those numbers have turned out to be wildly wrong - in fact zinc is running a surplus to the tune of 181,000 metric tons. In addition, buying organizations will want to pay careful attention to the flow of metal into LME warehouses.

According to the most recent LME data available, zinc stocks declined in May by some 57k+ metric tons but some analysts believe that just the opposite will happen through July – more inventory will make its way into LME warehouses than out of them. In addition, plenty of extra inventory exists in non-LME warehouses throughout Asia and the United States.

Market sentiment toward zinc has hinged on the supply/demand equation and it has become a little less likely that any real zinc shortage will materialize.

The Outlook

Three-month zinc fell significantly in June, closing at $2,000/mt. As with lead, zinc’s rally this spring wasn’t sustainable in the face of a bearish commodity market. In the long-term we expect zinc prices to stay range-bound at best.

2000

1920

2300


Zinc Zn

Current Price

Resistance

Support


2016

2048

2080

2112

2144

2176

2208

2240

2272

2304

2336

2368

2400

2000

ResistanceSupport

LME Zinc: July 1, 2015

2000

1920

2300


Zinc Zn

Current Price

Resistance

Support


2016

2048

2080

2112

2144

2176

2208

2240

2272

2304

2336

2368

2400

2000

ResistanceSupport

LME Zinc: July 1, 2015

Market Commentary


2 Global production


4 Zinc refining capacity utilization rates

Zinc Drivers

In the short-term, prices could rally after this significant price drop. This month could be a good opportunity for buyers to meet short-term requirements near support. For longer-term purchases, we see no need to buy forward as long as prices remain below $2,420/mt.



Tin Sn

Tin has not had a good year. Prices have fallen 24% year-to-date after falling 15% in 2014. All base metals have fallen this year (and continue to fall) but at least a couple have attempted to show some price strength. Tin has been unable to rally at all for the past 18 months. A sideways market for tin would be a big improvement.

Moreover, the Indonesian tin export restrictions have essentially backfired. The limit of 4,500 metric tons per month, set to go into effect in April never happened. In fact, according to Indonesia’s Ministry of Trade, the country actually exported close to 6,300 metric tons in May.

Indonesian producers expected prices to rebound to $20,000 in the second half of the year against production cut backs. That scenario seems unlikely as tin is trading closer to $14,000/mt this month, below producers’ operating costs of more than $16,000/mt.

The Outlook

Three-month tin fell in June, closing at $13,880/mt. Prices continue to free-fall and tin is now at its lowest level in 6 years. Tin is not the only metal at a 6-year low - this is not a coincidence in bearish markets. Tin however, is the worst performer among industrial metals. The long-term outlook remains bearish until we see signs of an upturn.

13380

13000

16500


Tin Sn

Current Price

Resistance

Support


14553

15246

15939

16632

17325

18018

18711

19404

20097

20790

21483

22176

22869

13880

ResistanceSupport

LME Tin: July 1, 2015

13380

13000

16500


Tin Sn

Current Price

Resistance

Support


14553

15246

15939

16632

17325

18018

18711

19404

20097

20790

21483

22176

22869

13880

ResistanceSupport

LME Tin: July 1, 2015

Market Commentary


2 Indonesian export quantities

3 Chinese tin ore imports

4 Global production

Tin Drivers

For the short-term, prices could rally although they would probably lose momentum as they approach short-term resistance at $16,500. Consider placing orders for short-term requirements. For longer-term purchases, we see no need to buy forward as prices lack upside momentum.


HRC HRC

464

448

485


HRC HRC

Current Price

Resistance

Support

400

500

600

700

800

JUL-

13AUG-13SEP-13OCT-1

3NOV-

13DEC-13JA

N-14FE


4JU

N-14JU

L-14

AUG-14SEP-14OCT-1

4NOV-

14DEC-14JA

N-15FE


5JU

N-15JU

L-15

HRC US ($/t)

MetalMiner IndX(SM) HRC: July 1, 2015

ResistanceSupport

464

448

485


HRC HRC

Current Price

Resistance

Support

400

500

600

700

800

JUL-

13AUG-13SEP-13OCT-1

3NOV-1

3DEC-13JA

N-14FE


4JU

N-14JU

L-14

AUG-14SEP-14OCT-1

4NOV-1

4DEC-14JA

N-15FE


5JU

N-15JU

L-15

HRC US ($/t)

MetalMiner IndX(SM) HRC: July 1, 2015

ResistanceSupport

1 MOH service center inventory

2 US import levels (volume trends)

3 Total China steel exports

4 Raw material input cost trends

5 Quoted lead times

Steel DriversMarket Commentary

For the short term, consider placing orders only for needed requirements. Should prices in the short to medium term break above the $485/st resistance level, then buying organizations may wish to cover for known requirements.


Without a doubt the historical passage of several trade measures in the US has the potential to change the steel products landscape in the coming years. After all, US HRC steel prices have dropped by 25% since the start of this year. The steel industry (e.g. producers) believes this price drop has come as a result of massive imports that have begun to slow. Certainly the data supports that conclusion though other factors undoubtedly contribute to falling steel prices.

Regardless of where one stands on the import issue (either for or against) buying organizations are likely to feel the impact of the new legislation. We will discuss some of these impacts in upcoming reports.

A Fundamentals View

Meanwhile HRC pricing has held steady from a month ago (up slightly). However, service center inventory levels (which supply some 40% of all metal to buying organizations) still suffer from too much MOH inventory. According to the latest MSCI data, steel product inventories jumped 11% in June from the same period in 2014 and perhaps more significantly, the current MOH inventory of 2.8 months of supply remains above “healthy” inventory levels.

With higher than healthy MOH inventory, service centers remain weak buyers in the market and that helps keep a lid on prices.

The Outlook

HRC prices seem to have begun to stabilize after falling for nearly a year by closing the month of May at $464/st. We remain hesitant to call bottom particularly as the broader commodity markets remain bearish and the dollar still holds stronger. It would appear challenging for HRC to make any bold price moves to the upside. But we may have found HRC’s floor. This will require buying organizations to be particularly mindful of any upward price movements.


CRC CRC

590

565

610


CRC CRC

Current Price

Resistance

Support

500

600

700

800

900

JUL-

13AUG-13SEP-13OCT-1

3NOV-

13DEC-13JA

N-14FE


4JU

N-14JU

L-14

AUG-14SEP-14OCT-1

4NOV-

14DEC-14JA

N-15FE


5JU

N-15JU

L-15

CRC US ($/t)

MetalMiner IndX(SM) CRC: July 1, 2015

ResistanceSupport

590

565

610


CRC CRC

Current Price

Resistance

Support

500

600

700

800

900

JUL-

13AUG-13SEP-13OCT-1

3NOV-

13DEC-13JA

N-14FE


4JU

N-14JU

L-14

AUG-14SEP-14OCT-1

4NOV-

14DEC-14JA

N-15FE


5JU

N-15JU

L-15

CRC US ($/t)

MetalMiner IndX(SM) CRC: July 1, 2015

ResistanceSupport

1 MOH service center inventory

2 US import levels (volume trends)


4 Raw material input cost trends

5 Quoted lead times

Steel DriversCRC has fallen by some 21%+/- since the beginning of the year. The pricing dynamics for CRC are similar to HRC. Undoubtedly the impact of the trade legislation signed into law in late June will impact all steel product market segments including CRC.

Globally, European mills have filed an anti-dumping suit against cold rolled coil imports from China. India has begun collecting duties on HRC products from three countries but could add CRC tariffs as well. In short, all eyes remain on China but other countries are also contributing to the oversupply.

In the meantime, domestic steel capacity utilization rates are running at 72.5%, down 7.4% from a year ago. Generally speaking a “healthy” capacity utilization rate is up above 80%.

The Outlook

CRC prices have crept up during the month of June closing at $590/st but failing to breach last month’s short-term resistance levels. We also still see some price weakness on the horizon and continue to remain hesitant to call bottom particularly as the broader commodity markets remain bearish and the dollar holds stronger. Like HRC, it would appear challenging for CRC to make any bold price moves to the upside.

Market Commentary

For the short term, consider placing orders only for needed requirements. Should prices in the short to medium term break above the $610/st resistance level then buying organizations may wish to cover for known requirements. Otherwise, buy only as needed.




HDG

HDG continues to face price weakness, falling from $619 to $594/st, a 4% price drop. Interestingly, while steel imports have dropped during the month of May by 3.6% from April, HDG imports have continued to increase growing by nearly 17% from April to May after having jumped 20% from March to April. As with the other forms of metal, the new trade legislation will provide more enforcement “teeth” to the import process.

Six steelmakers with major US operations filed a trade complaint over HDG in June, seeking punitive tariffs for alleged unfair pricing of imported steel from China, India, Italy, South Korea and Taiwan. The suit is the first salvo in the campaign this year by the beleaguered US steel industry to protect itself against a record flood of imports.

And though US auto numbers remain positive, Chinese automotive sales continue to decline placing additional price pressure on HDG prices - which have fallen some 24% since the beginning of the year. (See chart to the right)The OutlookWe remain hesitant to call bottom particularly as the broader commodity markets remain bearish and the dollar holds stronger. Like HRC and CRC, it would appear challenging for HDG to make any bold price moves to the upside. It is possible, however that we will see some price stabilization.

594

580

630


HDG HDG

Current Price

Resistance

Support

JUN-14

JUL-

14AUG-14

SEP-14OCT-1

4

NOV-14

DEC-14JA

N-15

FEB-15

MAR-15

APR-15

MAY-15

JUN-15

0

100

200

300

400

500

600

700

800

900

China HDG Monthly Avg Prices (USD)

HDG US ($/t)

MetalMiner IndX(SM) HDG: July 1, 2015

ResistanceSupport

550

650

750

850

JUL-

13AUG-13SEP-13OCT-1

3NOV-

13DEC-13JA

N-14FE


4JU

N-14JU

L-14

AUG-14SEP-14OCT-1

4NOV-

14DEC-14JA

N-15FE


5JU

N-15JU

L-15

594

580

630


HDG HDG

Current Price

Resistance

Support

JUN-14

JUL-

14AUG-14

SEP-14OCT-1

4

NOV-14

DEC-14JA

N-15

FEB-15

MAR-15

APR-15

MAY-15

JUN-15

0

100

200

300

400

500

600

700

800

900


HDG US ($/t)


ResistanceSupport

550

650

750

850

JUL-

13AUG-13SEP-13OCT-1

3NOV-

13DEC-13JA

N-14FE


4JU

N-14JU

L-14

AUG-14SEP-14OCT-1

4NOV-

14DEC-14JA

N-15FE


5JU

N-15JU

L-15

Market Commentary

1 US import levels (volume trends)2 MOH service center inventory


4 Automotive sales

5 Quoted lead times

Steel Drivers

HDG

For the short term, consider placing orders only for needed requirements. Should prices in the short to medium term break above the $630/st resistance level then buying organizations may wish to cover for known requirements. Otherwise, buy only as needed.

594

580

630


HDG HDG

Current Price

Resistance

Support

JUN-14

JUL-

14AUG-14

SEP-14OCT-1

4

NOV-14

DEC-14JA

N-15

FEB-15

MAR-15

APR-15

MAY-15

JUN-15

0

100

200

300

400

500

600

700

800

900


HDG US ($/t)


ResistanceSupport

550

650

750

850

JUL-

13AUG-13SEP-13OCT-1

3NOV-

13DEC-13JA

N-14FE


4JU

N-14JU

L-14

AUG-14SEP-14OCT-1

4NOV-

14DEC-14JA

N-15FE


5JU

N-15JU

L-15



Plate PLATE

574

550

600


PLATE

Current Price

Resistance

Support

Plate

550

650

750

850

950

JUL-

13AUG-13SEP-13OCT-1

3NOV-

13DEC-13JA

N-14FE


4JU

N-14JU

L-14

AUG-14SEP-14OCT-1

4NOV-

14DEC-14JA

N-15FE


5JU

N-15JU

L-15

PLATE ($/t)

MetalMiner IndX(SM) PLATE: July 1, 2015

ResistanceSupport

574

550

600


PLATE

Current Price

Resistance

Support

Plate

550

650

750

850

950

JUL-

13AUG-13SEP-13OCT-1

3NOV-

13DEC-13JA

N-14FE


4JU

N-14JU

L-14

AUG-14SEP-14OCT-1

4NOV-

14DEC-14JA

N-15FE


5JU

N-15JU

L-15

PLATE ($/t)

MetalMiner IndX(SM) PLATE: July 1, 2015

ResistanceSupport

1 US import levels (volume trends)2 MOH service center inventory3 Total China steel exports4 Raw material input cost trends 5 Energy demand6 Quoted lead times

Steel DriversSteel plate prices have held nearly steady this past month despite continued weakness in the energy sector, which contributes heftily to plate demand. US imports of plate products grew 13% in May and are up 36% from the same five- month time period one year ago June – May.

The Outlook

Plate prices held steady this past month at $574/st. And indeed last month we indicated prices may be stabilizing. However, we remain hesitant to call bottom particularly as the broader commodity markets remain bearish and the dollar holds stronger. In addition, plate suffers from an inventory overhang that will take some time to work off.

Market Commentary

For the short term, consider placing orders only for needed requirements. Should prices in the short to medium term break above the $600/st resistance levels then buying organizations may wish to cover for known requirements.

Documents

Monthly Metal Buying [email protected] Tel. 773.525.9750 3 Editor’s Highlights 11 F M A M J J A S O N D 12 F M A M J J A S O N D13 F M A M J J A S O N D14 F M A M