Deutsche Bank's European steel research team points out that global hot-rolled coil prices are diverging significantly. US hot-rolled coil spot prices have reached $1330-1345/ton, up $336 or 34% year-to-date; German and Italian prices are $850-860 and $845-855 respectively; Chinese export prices are only $495-510, with US prices approximately 2.6 times higher than Chinese prices.
Even including transportation costs and the 50% US Section 232 tariff, the parity price for Chinese hot-rolled coil entering the US is only $900-920/ton, still about $410 lower than the US spot price. US steel mills, leveraging import barriers, longer delivery cycles, and pricing discipline, have maintained the BOF and EAF profit margin spread at $774 and $782/ton respectively. European demand remains weak, but since the implementation of new safeguard measures in July, Nordic hot-rolled coil prices have cumulatively increased by €65/ton, and will receive further support from CBAM. Deutsche Bank believes that trade policies are helping European and American markets isolate low-priced Chinese steel, and steel pricing is gradually shifting from global linkage to regional segmentation.
