Steel prices in the U.S. are running away from their European counterparts, creating a gap that could last until spring as the debt crisis hobbles the euro-zone economy, analysts say.
The market has weakened considerably in Europe, but has recovered in the world’s largest economy, thanks to an upturn in industry reflected by better-than-expected economic data.
U.S. hot-rolled steel coils, a market benchmark, traded at an average of $721 per short ton, $134 more than the Northern European price, in the week that began Jan. 2, according to the Steel Index, a London information provider. In the week of Oct. 24, the gap between the two products was $7, with the U.S. product trading at $646 a ton compared with $639 a ton in Northern Europe.
“It’s a sentiment thing,” said Colin Hamilton, a steel analyst at Macquarie Research. “In Europe, everyone is destocking as the economic conditions get worse, and in the U.S., people are restocking as the economic conditions look to be getting better.”
Globally, hot-rolled coils are trading at an average price of around $600 a ton, according to Credit Suisse.