U.S. Steel Prices Flat Ahead of Weak Demand Season

While steel prices soared in China this summer, U.S. steel prices were flat in August as the market remained in hiatus, awaiting further trade action from the U.S. government on unfair steel imports.

There was a great deal of hope that the Section 232 investigation into steel imports would give U.S. steelmakers another boost after the 2016 U.S. steel stock rally fizzled in 2017, but the self-imposed July 1 deadline for the investigation’s results came and went – and now the steel prices in the U.S. are treading water with the weak fourth quarter just around the corner.

The Commerce Department has until January to release its findings, and given the delay, it may very well take all of its allowed time. If that is the case, U.S. steel prices could see even more weakness.

In company news, Thyssenkrupp may reach a principle agreement this month to merge its European steel business with Tata Steel, with the company saying that talks have been “constructive” and are entering the final stretch, according to Yahoo Finance.

If these talks continue to progress the companies will ink a memorandum of understanding, which will pave the way for each company to take a more detailed look at the other’s books. This news comes following progress on a major hurdle to the combination. On Monday, the final separation of the British Steel Pension Scheme (BSPS) from Tata Steel UK, occurred. This frees Tata Steel UK and its affiliate companies from 15 billion pounds of pension liabilities and increases the prospects for Tata’s merger with ThyssenKrupp.

Leia Toovey has a B.Sc. in geology from Simon Fraser University, and her degree had a focus on resource economics. Out of school, she started working in the booming mining industry of Vancouver, Canada, covering junior mining stocks and commodities including potash, copper, nickel, oil and gold. Then she moved to New York and worked as a commodities analyst covering a breadth of commodities, from the Baltic Dry Index through the softs. As a geologist she has a greater understanding of the exploration and extraction side of commodities, and how changes in technology and the depletion of resources impact pricing. At Economic Calendar she covers a variety of commodities, providing daily technical and fundamental analysis and assessing major market developments.