We have not seen such a situation on the metal market for a long time. And, as always, there are reasons for this. And one of the main reasons today is inflation, which is approaching 9% to a new 40-year high. As a result, all the central banks of the leading countries of the world began to act and save the situation. But the most important thing happened on June 15, when the Fed announced that it was raising interest rates by 75 basis points at once, the most in one meeting since 1994. Everyone knew and talked about it, and, as always, they could not. expect the rate to be raised so dramatically.
We immediately saw how the entire market reacted, and the metal market was no exception. The fall in prices for scrap metal, hot-rolled coil, sheet and pipe accelerated and was sharp. The first shock passed, and by the end of June the situation calmed down a bit, which I observe. Everyone really wants to buy the material as cheaply as possible and sell their stocks as expensive as possible, unfortunately there are no miracles. The prerequisites that tomorrow a hot-rolled coil will cost $580 have not yet come, but will come later.
What is already observed, at all metallurgical enterprises there is a reduction in production. Then metallurgists will take care of servicing their production, because in a growing market they could not afford it. This will lead to a halt in production capacity for a while. And there will be a short-term surge in prices for everything, since the material in the finished warehouse will be needed by everyone at once.
Therefore, now everyone needs to make their own forecast of sales and purchases of material, with the possibility of alternative supplies from other sources. It is necessary to pay special attention to logistics, now this is a very sensitive topic and the risks have not disappeared yet.
Well, the most interesting is the prices for the month of July:
The price of a hot-rolled coil is $760-820 for the European market.
Hot rolled coil price $600-660 for Asian market
Hot rolled coil price $860-920 for US market
(for each buyer there are surcharges and discounts about which we can only guess, which are determined by the volume and terms of payment)
Thus, the ECB raised interest rates to zero for the first time in decades.