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High interest rates in US, energy shortages in Europe, oversupply in Asia

23 Sep 2022 16:39 reported by Mike Lo

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The prospect of the steel market is bleak because major markets such as the US, Asia, and Europe are not performing well. For example, the US steel market is constrained by high inflation, low consumption, and high-interest rates, while high energy prices and low steel demand constrain Europe.

Besides, Europe and the US cannot absorb surplus production in Asia, making Asia oversupply. High inflation in the US market depressed demand, which was further hurt by high-interest rates.

In addition to high inflation and low demand, the European market is also facing energy shortages. Sanctions on Russia have made EU countries pay a heavy price for Russia's plan to cut off the natural gas supply, and the final supply is still greater than demand. Therefore, European steel prices have continued to fall.

In the Asian market, supply exceeds demand. In the past, the surplus production in Asia was eliminated through Europe and the US. Now Europe cannot buy Asian steel products in large quantities, and Asian steel mills are resisting production cuts, resulting in Asian steel prices falling.

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