Issue 24, 2025 - This week's editorial: Nippon-USS deal advances, European longs deteriorate

Consistent with his favourite tactic of making big-impact market announcements late on Fridays, US President Donald Trump conditionally approved a deal last week for Nippon Steel to take a stake in US Steel, with the US to retain a “golden share” in the steelmaker of 51%. German rebar prices, which had remained stubbornly elevated for months, against the odds, as well as European long product prices in general, meanwhile stared at drops as competition increased. Scrap prices searched for direction following the Eid holiday, with Turkish mills still preferring cheaper Asian billet as they struggled with steel sales. Data showed Chinese steel exports remained elevated in May, with further growth expected in June, despite falling Chinese steel production.

Trump approved an unspecified combination between Nippon Steel and US Steel in an executive order on Friday evening, with the US government maintaining further oversight powers. The two companies later referred to the arrangement as a "historic partnership" that includes a "national security agreement" with the White House. The only substantive transaction detail mentioned Friday was that $11 billion of new investments will be made by 2028. The companies' statement says one "greenfield project" will be completed after 2028.

German rebar prices saw the drop some market participants were expecting, after defying the downtrend in neighbouring countries for months. Base prices largely undercut the mark of €400/tonne ($460), which had long remained untouched. Mills have now factored in falling scrap values after German merchants initially resisted selling significant scrap volumes at lower prices. Moreover, Riva Germany has restarted its rolling mill, increasing supply.

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