Posted on 13 Jun 2016
Steel prices are heading in opposite directions, depending on what part of the globe you are on. Since late April, steel prices in Asian markets have plunged 20%, while those in the U.S. have surged 30%, mainly due to drastic tariff increases.
Spot contract prices of hot-rolled coil, used in automobiles and home appliances, have fallen to the upper range of $300 per ton in Asia.
China's steel exports have been expanding since last year, and the trend could accelerate, according to a representative from a trading house dealing with steel products.
The U.S. and European countries are wary of China's glut. The U.S. has imposed anti-dumping measures, including higher tariffs on goods from China, which have helped to lift steel prices there. In Europe, too, steel prices are on a steady incline.
With China's excess steel being shut out of Western markets, more of it has been arriving in the rest of Asia, pulling down prices.
So in Asia, the situation is pressuring profits at steelmakers, whereas in the U.S., automakers and other steel buyers find themselves in a similar vise.
Meanwhile, India and Vietnam have taken temporary measures against Chinese steel imports to protect their own economies. If other Asian countries follow suit, serious trade conflicts could erupt.
