RBC Capital Markets notes that steel prices have risen significantly in 2011, with North American, European and imported East Asian HRC prices up an average 17.1% year to date. Its latest analysis also notes a stabilizing in hard coking coal prices and thermal coal prices moving upwards. Freight rates were flat or down during the January 25th 2011 to February 1st 2011 week.
After peaking at USD 383 per tonne on January 20th 2011, spot hard coking coal prices declined for six consecutive trading days as dry weather in Queensland resulted in the resumption of contract shipments. The HCC price declined a total of 10.4% to USD 343 per tonne over that period. However, prices swiftly reversed direction earlier this week, increasing USD 16 per tonne (4.7%) over the past two days.
RBC said that "The upswing in price is primarily due to supply concerns, driven by cyclones off the east coast of Australia and to a lesser extent a labor strike at Teck Resources'' second largest metallurgical coal mine in Canada."
Thermal coal prices moved higher following two consecutive week-over week declines. The price increase was driven by increased thermal coal demand in Asia, a proposed strike action at Columbia’s largest open pit coal mine, and cyclones in Australia.
Iron ore prices crept higher this week with market activity dwindling ahead of the Chinese Lunar New Year holiday.
Freight rates were flat or lower this week. Year to date, iron ore freight rates from Australia and Brazil to China are down an average 21.5%, while coal freight rates from Australia to China are down a much more modest 3.4%.
Steel prices posted another strong gain this week, led by rebar prices in Europe and HRC prices in North America. HRC prices have moved noticeably higher since late 2011.
(Source: www.steelguru.com )