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Hard times are coming for European metallurgists, as well as for steel importers.


We are on the verge of significant upheavals. This is already felt by everyone, from traders and scrap metal collectors to pipe manufacturers. Everyone remembers when interest rates were close to zero, when pent-up demand arose after COVID-19 was a thing of the past. The minimum price for August 2020 was $450 per 1 ton of hot-rolled coil in the USA, there were also discounts for some consumers.

With the price of hot rolled coils skyrocketing into space with Elon Musk and his Starship program, no one was expecting prices to soar. Like a crash that's getting closer and closer. Everyone who wanted to buy has already bought. Now many people think that price growth will resume again in the middle of the third quarter. Why am I talking about this?

I know from my acquaintances and former clients about their moods about the market. The situation will change as quickly and abruptly as with the rise in prices for hot-rolled coil. Many central banks around the world have already started raising interest rates. We knew and saw it. The Fed was the only one still holding back from a sharp drop in prices.

When the inflation situation got out of control and reached its peak, the Fed jumped into action and did not stop there until it reached 2%.

I think this is now the most important argument of all central banks, and we hear about the fight against inflation from all politicians in the world. And as always, not everyone will be ready for such a price drop. History, as a rule, does not teach us anything, and we quickly forget everything.

Protective duties and quotas are also not helping steelmakers in Europe and the US much. I don't think we should be surprised when the price of hot rolled coil drops to $580. I remember very well 2008 and the collapse in prices for hot rolled coil.
How to act at such a time?

Many need to rethink their position in sales, whether it be hot rolled coil, sheet or pipe. The product should be as close to the consumer as possible. Customers still need to restock even the smallest quantities. No one will wait in a falling market, and only those who solve this issue will be able to keep sales at least at a satisfactory level.

Exporters of hot rolled coil need to decide how not to lose the European market and the US market. There are always options, but not everyone is ready to consider them.

But time will do it, and only those who can decide and choose the right model will be able to get ahead of their competitors and gain an advantage in the market.

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