Pricing trends in China and Europe may diverge

China's control over its domestic steel industry could provide price stability in the country, while in other regions, namely Europe, prices continue to rise. This opinion was expressed at a virtual conference on Wednesday by Stemcor's Dick Sands and Kallanish European editor Emanuele Norsa.

“China is keeping steel prices under control because it is critical for them to maintain the stability of the local economy,” Sands said, referring to recent price adjustments and export taxation. Unlike the previous one, “the export tax risk is now on the buyer's court,” he said.

Such moves can guarantee domestic supply, only then will China take the next step - to cut domestic production in the interests of preventing pollution and without disrupting the economy, Sands said. He recounted his visit to the Korean coast many years ago, "where the sky was blue when you looked east toward Japan, and dark dirty when you looked west toward China."

Regarding the relationship of factories in Europe and North America, he said that none of them will massively increase production in the interests of maintaining high prices. He believes this can keep prices high for years to come. This idea was also expressed by Antonio Marcegaglia at the opening of the conference.

Looking at the actions of the new US government, he believes that prices in the US should decline slightly, while European prices may still rise, "so they will eventually converge at the end of this year."