The prices for steel strip in Europe continue to rise, despite a lack of demand. The European hot dip galvanized coil market has entered volatile territory, with prices continuing to rise, while demand remains weak and few bookings are made.
Buyers are very nervous about buying forward, with weak order books and worries about cash flow.
We are close to the traditionally "quiet" summer period and with fears of further price rises in the autumn the forward situation looks very poor. A crisis in the construction industry in the UK and falling consumer demand will only add to the problems.
As reported earlier, the German steel users are very unhappy about the situation and the US automotive manufacturers are taking a united response against spiraling raw material costs.
If (as expected), the credit squeeze and rising fuel prices impact upon car sales then the largest domestic markets for steel are likely to continue to reduce, then the steelmakers may find themselves relying too heavily on eastern markets.
I wonder if the steel industry will begin to regret the very aggressive pricing policy adopted during this year.