"Steel prices have remained at three-year highs since the strong rebound in the first quarter of 2016, alleviating concerns about how long the recovery would last," Moody’s Vice President Hubert Allemani stated.
He continued, "While European prices may soften during the second half of this year because of a retreat in the cost of raw materials and seasonality, we do not expect a significant decline."
Steelmaking profits should be supported by construction, the largest steel-using industry in Europe, as well as auto manufacturing, the release noted.
However, imports into the Eurozone could take away some demand from domestic steelmakers, the agency explained.
European steel exports to the United States could also be impacted if US President Donald Trump’s administration follows through with promises to restrict steel imports into the United States.
Last week, Trump announced an investigation into a 1962 trade agreement that would allow him to limit steel imports if they are deemed to threaten national security.
Moody's noted that demand remains a key concern for European steelmakers because it is expected to grow less than two percent this year.
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