Falling iron ore prices, cheaper imports, and a seasonal slowdown in demand are conspiring to cool reference steel prices across the continent. Hot rolled coil prices gradually declined in August after six months of gains in a row, giving European steelmakers some of the biggest profits in years.
Across the Atlantic, the rally continues. Hot rolled coil futures are approaching $2,000 a tonne, supported by foreign import tariffs that President Joe Biden is in no hurry to lift. If it does, it could boost European prices and cool the prices paid by American consumers.
European manufacturers and construction companies should not be too excited about a rapid reduction in costs. The recession in demand is seasonal and could rise again next month.
"If activity increases in September, prices will hold steady," said Christian Georges, senior analyst at Societe Generale SA. "Automotive demand is an ongoing uncertainty with semiconductor shortages, but order books are strong."
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