As expected, the short-term stress for metallurgists ended and the market calmed down for a while. Many companies have already summed up the results for June and formed a portfolio of orders for July. The month was very difficult and made all market participants nervous, from traders and suppliers of scrap metal to traders of a rolled metal warehouse.
Let's see what happened. Metallurgists were the first to feel the strong pressure of buyers and, as always in such cases, they made a decision that has been proven over the years. Reduced production volumes and planned shutdowns for repairs and maintenance of equipment. This was followed by a sharp reduction in the purchase of scrap metal by almost all metallurgists in the world, as a result of which they brought the minimum cost of scrap metal to $320 and began to replenish their warehouse stocks from this price. As a result, the rise in prices for scrap metal was not long in coming and by the end of the week amounted to $390. (taking into account the minimum prices throughout the market) and I think in the short term scrap metal prices can still rise to $440.
What am I looking forward to at this time? Short-term growth of hot-rolled coil and sheet in August-September, mainly in October the situation will change and the decline will continue throughout the market.
From July 15, metallurgists will start offering hot-rolled coil for August and will try to raise the price by $40-60, followed by price increases for September as well.
As a result, we will see the following prices for August:
Hot-rolled coil for the European market - $800-860.
Hot rolled coil in the Asian market - 660-720 dollars.
Hot roll in the US market - 900-940 dollars.
And do not forget for each buyer there are both surcharges and discounts from the base prices.
During the week I talked with many market participants, someone is waiting for the price to continue falling, waiting for the price to fall even lower, someone is bribing warehouses. But everyone is sure that now prices should fall even lower. I want to say that I personally do not see these preconditions yet. It will be a little later than I will share with you later.
Thus, the ECB raised interest rates to zero for the first time in decades.