Worldwide underlying sector demand has remained lacklustre but this fundamental weakness has not prevented yet another increase in steel prices in December. In China, enforced closures of induction furnaces have helped long product prices rise faster than those of flat products but we do not think that further increases are sustainable. As the speed of capacity clamp-downs drops and raw materials costs ease, weak demand should once again lead to a fall in steel prices. Meanwhile in Europe, short term steel prices will be supported by yet another set of antidumping duties. However, with demand outlook weak for 2017 and no capacity closures in sight, this surge is unlikely to last past the holiday season.