Thus, the ECB raised interest rates to zero for the first time in decades. Much later than his colleagues in America, Great Britain and other countries began to do it. We have seen the euro reach 1:1 parity with the dollar, falling to a 20-year low. The annual inflation rate in the UK reached 9.4% in June. Now it is clear that all the central banks of the world have joined the fight against inflation and there are no other options but to raise interest rates.
As a result, we saw pressure on hot rolled coil prices during the week, which fell below $800 to reach $770 in the European market. But already in the second half of the week, metallurgists were able to even out the situation, since the main volumes for August had already been contracted. By the end of the week, the price had risen above $800 again, and on Friday the price was already at $830.
For scrap metal, the situation is reversed, prices are falling below $400 and pressure from buyers (metallurgists) is increasing. Having reached a maximum of $420 in the Turkish market, the price on July 21 was already $350-360. Everything indicates that metallurgists do not yet see those sales volumes in order to continue buying scrap metal at a higher price.
In my opinion, this suggests that price fluctuations will intensify in the near future, and the confrontation between sellers and buyers in the metal market for all groups has not yet ended and will only grow. Many merchants still have a sufficient amount of goods in warehouses, but everyone has to replenish warehouses. Someone in a large volume, someone in a smaller one, but everyone needs it. Everyone is concerned about one question, at what price to make purchases? My answer, as always, is simple, take as much as you can sell. Well, keep the balance in stock, only what is in demand at the moment. Don't wait until the price hits $500, you won't take that chance anyway. At this point, you will simply be afraid that the price will go even lower. Do your job every day, follow the market and what is happening in it. The time will come and I hope that everyone will make the right decision at what level is best to replenish their stocks at the best price.
As always, my price expectations from July 25 to August 1:
Hot-rolled coil in the European market - $820-860
Hot-rolled coil in the Asian market - $600-640.
Hot rolled coil in the US market - $860-900
(prices for all buyers are individual and depend on the volume of purchase and assortment and can be within $ 20-40 of the base prices)
I'm looking forward to the next Fed meeting and what the interest rate will be, let's see how the whole market reacts.
Thus, the ECB raised interest rates to zero for the first time in decades.