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market | IST

Steel price cools off 20% from all-time highs; iron ore price too trend lower

Since the start of November, steel and iron ore prices are trending lower. In fact, steel prices are now trading at around eight-month lows and the prices have come off by nearly 20 percent from their all-time highs, which was in the month of May when China future steel prices were trading at $5,975 per tonne.
Steel production in the second half of this year has slowed down and the expectation is that the coming quarter could see further deacceleration. The furnace or the utilisation capacity stands at just about 66 percent, while in the first half of this year it was around 78 to 85 percent.
The declining temperatures due to the onset of winter has led to a decline in production but the demand has been declining be it from the construction, manufacturing and automobile sectors and this is expected to weigh in on prices.
Steel prices have had an impact on iron ore as well, which is its key raw material and the iron ore price are trading at nearly one and a half year lows. So, from an all-time high of $220 a tonne in the month of May, we are now trading below $90 a tonne.
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