LONDON (Reuters) – Steelmakers’ margins are due to deteriorate in coming quarters despite a fall in the price of raw material iron ore because steel prices have also slumped, pressured by weak demand. FILE PHOTO: A worker walks past steel rolls at the Chongqing Iron and Steel plant in Changshou, Chongqing, China August 6, 2018. REUTERS/Damir Sagolj/File Photo “Even with the correction that we saw in iron ore, steel prices have fallen in just about every market, in Europe, the U.S. and China,” said analyst Serafino Capoferri at Macquarie in London. Benchmark spot iron ore for delivery to China SH-CCN-IRNOR62 hit a five-year high of $126.50 a tonne on July 3, having surged 74% over six months due to reduced supply from top exporters Australia and Brazil. Since that peak, however, iron ore prices have slumped 26%. “In the West, particularly in Europe, mills are really struggling. Demand there is weaker and the main headwind is the drop in car sales globally,” Capoferri added. (GRAPHIC – Iron Ore Prices in China Slump: here) The global automobile market, the second-biggest demand sector for steel after construction, has faltered recently due to declining economic growth, especially in top market China. In China,… Read full this story
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