Steel Price Tracker:Global HRC prices rebound,iron ore prices remain strong

Entering the seasonally weak Q3; will steel prices fall?

    Volatility in steel equities remains driven by macro woes/commodity pricemovements. As cost support is fading, we expect European prices to fall (currentspot conditions would imply significant further earnings upgrades across thespace). Thus, progress on anti-dumping policy and overcapacity removal remainscrucial in the long term. Our top picks: 1) ArcelorMittal, which looks attractiveto us based on strong cash flow (7-12% FCF yield), valuation and additionalupside optionality; and 2) ThyssenKrupp, on a possibly nearing event catalyst (Tatamerger), recovering earnings, and improving CF and sentiment.

    HRC: Southern European prices up E9t) t) )

    Last week, Southern European prices were up E9to E457(up USD15to USD527);

    Northern European prices were also up E8to E493(up USD15to USD569). Priceshave fallen E53in the past three months.

    US HRC prices up USD5