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U.S. Flat-rolled steel prices have dropped $20-40/ton so far in August, bringing hot-rolled coil down to $580-600/ton ex-works Midwest.

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There are two schools of thought. First, the current dip reflects a typical holiday slowdown and prices will hold or come back in September. In that scenario, buyers need to secure Q4 requirements and will return to ordering in September. On the supply side, mills are taking downtime in October and Q4 for maintenance, there is still some idled capacity (U.S. Steel and AK Steel) while higher-than-expected final HRC duties and tariffs will keep out imports. The steel market will, therefore, tighten and prices will hold at the current high levels.

U.S. HRC, CRC, HDG Imports (000 tons)

Steel_insight_us_hrc_crc_HDG_imports_082316

Source: AISI, Steel-Insight.

Steel-Insight could not disagree more. While we don’t expect freefall just yet, we do expect HRC prices to be back in the high $300s/ton at some point next year. (more…)

Apparently, when the government is a shareholder in your business. Questions are being raised as to why the French government has gone soft on Renault‘s emissions probe, omitting crucial details a Financial Times article states.

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The government report, published last month, concluded that some Renault models emitted nitrogen oxide at nine to 11 times higher than European Union limits, the article states. But three of the 17 members of the commission said that the published report did not include the full details of their findings, including the fact that a NOx “trap” in the Renault Captur went into overdrive when the sport-utility vehicle was prepared for emissions testing but not during normal driving conditions.

It was similar software that induced changes in behavior that tipped off U.S. authorities investigating Volkswagen “defeat devices” last year.

Apparently, Renault was not the only manufacturer to fare badly in the probe, which covered some 86 vehicles from a dozen automakers; yet the report did not find any cases of intentional attempts to cheat emissions, admitting that the government tries to give a positive brand image to firms it was invested in and hoped to push manufacturers in the right direction rather than seek prosecution.

One wonders what their attitude would be if it were Toyota or General Motors found to be posting erroneous data? The same article said the Fiat 500x registered NOx emissions almost 17 times European Union limits.

In Renault’s case, the Captur’s NOx trap purged five times in rapid succession at the end of scripted test preparations, allowing the car to produce much lower emissions than on the road the article explained, suggesting the car’s software could have detected that a test was being performed.

“Everything in a car is controlled by software now,” one commission member said, many of whom asked to remain anonymous. “We can’t be sure that Renault’s software detected the test like Volkswagen’s, but it seems that Renault has optimized the NOx filter to target this very specific set of conditions.”

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It would seem it may well have benefited Renault to have both the judge and jury in the dock with you, but does it benefit the wider community the government was elected to represent? This story, no doubt, has further to run.