Commodity prices fall on drop in ferrous markets
February 19, 2015 - Weekly Pricing Pulse
The IHS Markit Materials Price Index (MPI) fell 1.5% last week, led by softness in ferrous metal prices and freight rates.
The ferrous composite suffered its worst one-week drop since June 2013 as both steel scrap and busheling prices fell markedly. The move offset a slight increase in iron ore prices, which have stabilized in February—but are still down 48% since the beginning of last year. Globally, the steel industry continues to suffer from bloated capacity, weak profit growth, and lackluster demand.
The Eurozone was subject to both positive surprises and familiar headaches last week. Stronger-than-expected fourth-quarter growth (particularly in Germany) was shadowed by further wrangling over the end-of-month expiration of Greece's current bailout program. In the United States, weak retail sales belied an immediate windfall from softer oil prices, although we still expect consumers to react positively with a lag. Nevertheless, 10-year Treasury yields were back above 2% last week. In the week ahead, markets will be focused on the minutes from January's FOMC meeting for a confirmation of a midyear rate hike.
Pricing and Purchasing – Supply Management
Global Pricing Summary - Week of 19 February 2015
Key Prices & Demand Drivers