During the second week of November, the U.S. cold rolled coil (CRC) prices weakened, according to Platts Steel Market Daily global market reports. Prices in the U.S. steel market have been range-bound this year according to reports, although prices, a key driver in earnings for steel companies, have been volatile in recent years. Recent news reports say that the second half of 2017 has shown some weaknesses in steel prices, with announcements of price hikes by some producers in the U.S., such as AK Steel.
On a global level, steel prices have been strong, making the weak steel prices in the U.S. surprising to some. While ArcelorMittal‘s Europe segment revealed healthy profits in the third quarter this year, despite a slowdown in seasonal demand, the company’s NAFTA segment experienced the largest third quarter 2017 percentage decline in profitability of all its geographical segments.
In certain steel products the price spread between U.S. and international segments are unexceptional, particularly in hot roll coil. With cold rolled coil (CRC), differences between U.S. and international prices remained appealing because of the high spread of the HRC-CRC markets in the U.S.
Reports claim that demand for steel increases during the first quarter and the Trump Administration imports probe (Section 232) ending in mid-January 2018 are both factors that should boost steel prices next year, when combined with low supply chain inventories.
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