Big changes seem to be coming for the steel industry in Europe and the U.S. The European Commission, the executive arm of the EU, recently put forth a masterplan for a new industrial strategy in the 27-member bloc. Mainly the work of former Italian Prime Minister Mario Draghi, who now serves as special adviser to EC President Ursula von der Leyen, the plan hopes to boost HRC demand.
The report, released on September 9, stipulates €800 billion ($840 billion) in investments over the next five years. Part of this will include infrastructure upgrades as well as conversion to green technology. If passed, implementation would start in 2025.
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HRC Prices Continue to Fluctuate
Hot rolled coil’s applications are mainly in the construction sector. However, the flat rolled product also has use as feedstock for the production of welded pipes as well as the cold rolled coil downstream product, which subsequently has applications in construction and autobody.
That downstream product carries a premium that averages €100 ($105) per metric ton over HRC. Rising input costs are also helping to boost prices as the website Trading Economics showed that benchmark 62% Fe iron ore was $101.95 per metric ton CFR Chinese ports on November 21.
Data from the website also showed that while the latest price represents a 9.28% decline from the $112.39 recorded on October 7, it is nonetheless 11.62% higher than the $91.28 reported on September 10. Such trends could have a significant impact on the future of the steel industry.
Trump’s November 5 Win Could Impact Steel Industry
In the long term, Donald Trump’s victory in the 2024 US presidential election could place downward pressure on prices. This would prove especially true if he implements tariffs on Chinese imports, which could be as high as 60-100%. At present, it remains unclear whether Chinese producers would target the European market either through direct imports or possibly even via third countries.
“I think that the impact will be felt more in the US,” one source told MetalMiner. “They expect that the Chinese will pay more, but it is the end-user that will pay,” he said of consumers in the United States.
Trump beat out Democratic candidate Kamala Harris by a margin of more than one-third in the US presidential election. Trump is due to take the oath of office on January 20, giving him a second term as U.S. President, which follows his first term from 2017-2021.
Big changes could be in store for the steel industry. Check if your service center is providing you with price transparency for your steel spend.
Auto Companies Continue to Face Problems in EU
On November 20, steel news sources reported that automobile group Ford Motors had announced plans to cut 14% of its European workforce, resulting in layoffs of up to 4,000 positions. The U.S. multinational pointed to poor demand for electric vehicles, weak government support as well as imports of Chinese-produced vehicles.
“The U.S. automaker is the latest – after Nissan, Stellantis and GM – to cut costs as the sector faces challenges that include EVs that are too expensive for consumers to buy,” a Reuters report stated.
Germany’s economic growth also remains constrained, the EC said in a November 15 report. The report forecast that economic growth in the EU’s largest economy is due to rise 0.7% and 1.3% respectively in 2025 and 2026, from an expected decline of 0.1% in 2024.
“High uncertainty has been weighing on consumption and investment, and the trade outlook has worsened as global demand for industrial goods weakened,” the EC noted.
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